Corea cone ted LEGAL GUIDE Technology Startup GuideTechnology Startup Guide Fraser Milner Casgrain ur F M C LEGAL GUIDE — Law —Table Of Contents INTRODUCTION THRESHOLD ISSUES WHEN STARTING ‘A TECHNOLOGY BUSINESS Duties to Previous Employers and other Persons Ownership of Intellectual Property CHOICE OF BUSINESS ORGANIZATION Sole Proprietorship Partnership General Partnership Limited Partnership Joint Venture Corporation How Do | Incorporate? Where Do | Incorporate? CBCA vs. OBCA Incorporation Canada vs. United States ADVANTAGES OF CANADIAN INCORPORATION Canadian-controlled Private Corporations ("CCPC") Company Advantages Founder Advantages Employee Advantages ‘What if the Company Cannot Qualify as a CCPC? Eligible Investors Lower Costs ‘Advantages Of U.S. Incorporation ‘Merger & Acquisition Transactions Special Considerations for U.S. Investors Corporate Considerations ‘Weighing the Options Exporting a Canadian Company to the U.S. Capital Structure ISSUING SHARES TO FOUNDERS Dividing the Ownership Pie Valuing Founders’ Shares Income Splitting Shares Held Directly by Family Members Shares Held By a Family Trust Shares Held by a Holding Company Tax Planning and Valuation Vesting and Buy-back Rights Sowcvcemervvanunuwnn