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[R156]Registering A Small Business

by Holly Crosgrey, Hol

The basic principles of incorporating a small business are as follows:

1) Choosing a Name

2) Obtaining a name search report

3) Completing a form of Articles of Incorporation or memorandum of association, a form of Notice of Directors and/or Notice of Registered Office

4) Setting Up Your Corporate Minute Book

5) Determining if you need to be extra-provincially registered in another jurisdiction within the same country or registering in to carry on business in other countries.

6) Maintaining Your Company's Records

Choosing a Name When Incorporating a Small Business Business

Great consideration should be given to the name that you choose when incorporating a small business. You must ensure this name is not similar, does not sound the same as or is remotely the same as any other corporation, business name, sole proprietorship, partnership or trade-mark registered in that country, state or province as the case may be. It is not enough that the name is available. It can still be considered a conflict. Some governments will accept a name that is only different than others already registered which may not be enough to determine whether the name could be a conflict in the future. If it turns out to be a conflict you may be forced to change the name which will be very costly regardless of the fact that your government allowed you to incorporate the name. Using a qualified search house to assist you with obtaining your name search report will cut down the chance of this happening since they are trained. You need to check with the jurisdiction in which you wish to incorporate and see if they have guidelines that can be followed. In Canada for instance it is best to have a search house assist you since they are trained to know which names would be a conflict. Sometimes even if a name sounds the same it could be a conflict, such as using the words "1st" or "First".

Obtaining a Name Search Report for Incorporating a Small Business

You will be required to provide a Name Search Report when incorporating a small business. You should obtain your name search in advance since if you register online or in person, you will be required to provide the report number or a copy of the report as the case may be before you will be able to incorporate.

Incorporating a Small Business - Numbered Company

If you do not wish to go through the procedure of obtaining an alpha name for your company you can register a numbered company in most jurisdictions. In Canada for instance you can register a company with names such as 2019977 Ontario Inc., 2019977 Alberta Ltd., or even 2019977 Canada Inc. Many people when incorporating a small business will register a numbered company and then register a business name against the company, i.e. 2019977 Canada Inc. c/o as John's Hardware Store.

Completing a Form of Articles of Incorporation When Incorporating a Small Business

Each government will have its own form of articles of incorporation or memorandum of association. Each government has a section on its website which outlines the requirements for incorporation and the forms to be completed. In most cases you can download these forms, fill them in and print them off. Frequently additional forms are required to be completed as well including a Notice of Directors and/or a Notice of Registered Office either at the time of incorporation or within so many days after incorporation. When you register online the government will request the registration number associated with the name search report you ordered.

Some governments will allow you when incorporating a small business to register a company with articles of incorporation that are not correct. The governments look for specific information to be contained in the articles. When incorporating a small business you could still be filing deficient articles and later on you may have to amend them when a government agency or another matter comes to light. It is a good idea to either hire a solicitor to register your business or buy some type of incorporation kit to assist you. It's not difficult. You just need to understand the clauses that should be contained in the articles for them to be complete.

An example of where someone could go wrong is when they are incorporating a small business and they provide for only one director on the articles. In some jurisdictions you must show a floating board of say 1 to 10 in order to change the number of directors easily and if you do not do so and you want to bring on another director later on then you will need to amend the articles and this can be costly. Again, it is a simple change but if you do not know the fine details then you will make a mistake which could cost you in the future.

When incorporating a small business you will be required to provide the name of the company, the registered office address (which is the address where government mail can be sent), the names of the directors and their addresses (these must be physical addresses where the directors can be located in person), the nature of business (which should in most cases be left blank to enable any business to be carried on), the share attributes (which in most cases would be an unlimited number of common shares), the attributes for the shares (which in most cases can be not applicable if only one class of shares is shown), the transfer restrictions (which should be upon approval of the directors and shareholders) and the special provisions (which provide that shares cannot be sold to the public and the number of shareholders will be less than 50).

Directors

Incorporations are governed by the business corporation statutes in the various jurisdictions. For instance in Ontario, Canada it is called the Business Corporations Act. In Ontario Section 105 of the statute provides that a director of a corporation (a) must be at least 18, (b) of sound mind, and (c) a person, (d) not bankrupt. Each jurisdiction will have similar requirements for someone to be a director of a company.

Setting Up Your Company's Minute Book Subsequent to Incorporating a Small Business

This is the part that many small business owners do not bother to do and it is very important. Once you are incorporated you will need to appoint the officers, approve the form of share certificate, allot the shares to the shareholder and the shareholder has to pay for the shares, and elect the permanent directors. If you do not do this and you are the owner of the company and something happens to you, there will be no record of you being the shareholder and therefore the ownership of the company comes into question. As well, if you decide to sell your company down the road and you have no minute book, then you will have to pay to have one set up before you can sell and this will be much more costly than if you had done it in the first place. Your minute book can be a binder rather than an expensive minute book.

Small business franchise opportunities are definitely not limited to food kiosks and carpet cleaning. There are literally hundreds of businesses franchised in the United States, ranging from automotive and children's franchises to pet and travel service franchises. Whatever kind of business you might be looking for, the spectrum of choices is limited only by your imagination and level of determination.

But how do you determine if a small business franchise opportunity is really right for you?

Franchise Versus Business Opportunity

Perhaps the best place to begin your research is to briefly explore the difference between franchises and business opportunities.

A business opportunity is purchased outright. You, and perhaps your partners, own it and operate it under the name you have chosen. Typically, the seller makes his profit by delivering the equipment, real property, training or service that you just purchased. In some cases, the seller might earn residual income from your success (as is the case in a network marketing business). In most business opportunities, though, your relationship with the seller ends when you purchase the business. Basically, you are on your own at that point.

A franchise, on the other hand, is an ongoing relationship between franchisor and franchisee. The franchisor collects a fee up-front and also receives ongoing royalties in exchange for brand name recognition, an established business model, training and support. The franchisee receives the benefit of this brand name recognition and proven-successful business system. In exchange, the franchisee is required to follow established guidelines and policies regarding the operation of the business in order to ensure consistency from store to store.

Home Business Franchises Are Booming

One of the really marvelous benefits of a small business franchise is the ability to run it from your own home. In fact, many franchise companies encourage you to do so.

A home business franchise, allows you to enjoy the enormous benefit of an established company while avoiding the expense and headache of a storefront environment. Plus, many franchise companies invest their time in training you to run your franchise business from home. Your success is certainly in their best interest, so they will make sure you are properly trained and equipped.

One of the great benefits of being a home business franchisee is the ability to drawn upon the experience of other franchise owners. You will find that this network can provide a wonderful source of advice, encouragement and camaraderie.

Knowing your strengths and weaknesses are important when considering a small business franchise
While small business franchises have a considerably higher success rate than start-up businesses, you need to consider your natural strengths and weaknesses when deciding whether this is a good fit for you.

For example, being a team player is an essential factor in running a successful franchise of any kind. While you may be your own boss, you do not make the rules. You must be able to carefully and completely follow a system that someone else created. If you are willing to do so, you can successfully avoid many of the pitfalls responsible for the early demise of thousands of businesses.

Another necessary trait is the willingness to ask for help when it is needed. Again, this is the beauty of the franchise environment in that the small business franchise wants and needs you to succeed. In fact, the motto of the franchise industry is that you are in business for yourself, but never by yourself.

Do you consider yourself a "people" person? Do you enjoy providing a service or product that brings satisfaction to others? As a small business franchise owner, you will need to build loyalty and trust among your customers. The best and probably only way to accomplish this is by developing relationships with these important people. The good news is that if you answered "yes" to these two questions, you already possess two of the most valuable assets a franchisee needs for success.

Now, how do you feel about risk-taking? If the idea of having the safety net of minimum risk when starting your business appeals to you, then a solid, well-researched franchise is probably your best way to go.

After taking a serious and honest look at each of these personal characteristics, you should have a really good idea about whether investing in a small business franchise opportunity would really be your best choice. If so, do not be afraid to take the next step and begin carefully examining your wide variety of choices within the rapidly expanding world of franchising.

With so many highly successful niche markets to choose from, you are sure to find just the right fit.

Remember, a small business franchise requires much less capital than a traditional start-up business and certainly much less than a mega-franchise like McDonald's, while providing a recognizable brand name and a business system that works.

Article Source : Franchise Opportunities

About Author

Both Holly Crosgrey & are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Holly Crosgrey has sinced written about articles on various topics from Legal Matters, Residual Income and Business Loans. Holly Crosgrey is a law clerk with 20 years experience in corporate law in Canada. Attend at