Canadian Articles of Incorporation – Part 2 of 8:
Which Articles of Incorporation Should My Company Use?
Upon considering whether one wants to incorporate their business federally or provincially, the next factor to consider is what the entrepreneur wants to achieve through their articles of incorporation. In order to determine this, it is crucial to consider who will be running the business, where will the business obtain its funding, whether there are any concerns that need to be mitigated, whether the individual is selling a product or performing services, etc.
Clausehound.com has made this process a bit easier for you! You can see the various Articles of Incorporation documents available through Clausehound, each of which addresses diverse circumstances your startup may face. To simplify the selection for this introductory lesson on incorporation, Clausehound has narrowed the variety of Articles of Incorporation for this blog to those that address the needs of the following types of newly formed ventures:
(A) For Simple Startups:
• Early stage business, one class of shares
• Uncertain future for the business
• Limited number of initial investors and partners
(B) For High Growth Startups:
• Early Stage business, two classes of shares
• Business may take on new partners or raise capital
• Anticipation of changing needs of business
(C) To Convert Articles to Multiple Classes of Shares:
• Founder may wish to expand fundraising options
• Initial one or two classes of shares insufficient for business needs
• Reacting to growth and changing business needs
(D) Articles of Amendment for Startups with Investment Oversight Concerns:
• Founder is looking to improve comprehensiveness of Articles of Incorporation
• Assist in changing the business’ form to meet future needs
• Managing risk and liability related to raising capital from outside investors
Drafting the Articles of Incorporation is a crucial consideration for any DIY drafter.
You can use Clausehound.com‘s incorporation templates to ensure that your incorporation process is as easy and cheap as possible!
When drafting your Articles of Incorporation, you will want to consider the information in the following blogs:
1 of 8 – Introduction to Incorporating a business
2 of 8 – Which Articles of Incorporation should my company use?
3 of 8 – Selecting and protecting your company’s name
4 of 8 – What to consider when selecting Directors for my business?
5 of 8 – What to consider when selecting the corporation’s share attributes?
6 of 8 – What type of restrictions should be in place?
7 of 8 – Other Important Information
8 of 8 – What’s else should I consider before developing my business?
For access to Clausehound’s blogs related to various legal & business topics, please visit blog.clausehound.com.
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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.