Written by Ivana Palacios
UCalgary Law | JD Candidate 2024
There are many duties to which the directors and officers of a company are subject. It is unlikely that the average businessperson is aware of all of them. While this may be of initial concern for a new director or officer, there is good news. There are factors working in favour of directors and officers in Canada. Significantly, one of them is the defense of the Business Judgement Rule.
The Duty of Care is one of the fiduciary duties that are owe by directors and officers, the Business Judgement Rule (BJR) provides a defense when this Duty is called into question. In 2004, in what has become known as the People’s case, the Supreme Court of Canada officially adopted the BJR. This meant that the courts should give deference to business decisions due to the risk of hindsight bias when considering a decision made in the past. The BJR has three key elements:
The standard by which a board, director, or officer’s decision will be examined is whether it was made prudently and on a reasonably informed basis. The BJR helps directors and officers’ defended decisions made when they are call in to question in hindsight. There are many duties that directors and officers owe and this is only one of the factors working in favour of Directors and Officers in Canada.
 Bryce Tingle, Start-Up and Growth Companies in Canada, 3rd ed (Canada: LexisNexis, 2018) at 192.
 Peoples Department Stores Inc. (Trustee of) v Wise,  SCR 461, 2004 SCC 68.
 Ibid., at para 67.
 Supra note 1 at 193.
 Supra note 4.
BLG Business Venture Clinic Welcomes New Partnership with Calgary Start-Up Intrinsic Innovations
Starting a business is challenging enough on its own merits. Finding proficient, efficient, and affordable legal assistance is one challenge that the BLG Business Venture Clinic has a solution to. The Clinic is always looking for ways to help support entrepreneurs, start-ups, and growth-businesses with their legal needs. We are excited to announce that we have recently welcomed a new partnership with Intrinsic Innovations – Alberta’s International Start-Up Incubator.
Who is Intrinsic Innovations?
Intrinsic Innovations is a not-for-profit international business incubator located in Calgary, Alberta. Intrinsic was Co-Founded in 2021, by Andrew Sanden and Alec Wang, both of whom are extremely accomplished and intelligent businessmen and leaders. Intrinsic Innovations also offers a small venture capital fund titled “Intrinsic VC” which serves to financially aid their incubating businesses as they plant roots in Alberta.
Andrew Sanden, the CEO of Intrinsic, offers a wide range of expertise in the start-up space, as well as in the energy and defense communications sectors. Most notably, however, Andrew is passionate about economic immigration, and actively seeks to bring innovative ideas to Alberta.
Alec Wang, the former CEO and co-founder of Click Dishes and founder of Nomi, is an integral element of Intrinsic Innovation. His business experience, international presence, and desire to give back to the community is a major factor in the success Intrinsic Innovations has experienced thus far.
What does Intrinsic Innovations do?
Intrinsic Innovations offers the opportunity to help Canadian companies get their products into international markets and offers to help foreign companies expand or relocate to Canada. The partnership with the BLG Business Venture Clinic will be uniquely focused on individuals with who wish to move to Canada and start an innovative business here.
Intrinsic Innovations seized an opportunity in the market to capitalize on the growing appetite for entrepreneurial talent in Alberta. Being a start-up themselves, Intrinsic had to provide a unique edge to their business model. Focusing on entrepreneurs abroad, with brilliant ideas, and a desire to immigrate is the edge Intrinsic offers. They have a keen focus on technology innovation, and one of their goals is to have Alberta recognized as leader in technology commercialization on the world-stage.
Intrinsic has built a strong global network that gives founders access to experts, business connections and global services. Intrinsic Innovation’s programs take on a holistic approach that ensures founders are positioned to achieve success for their business and for their family’s settlement in Calgary. They provide a longer-term relationship-focused program that supports their clients for a period of 18-months to two years. The program is very personalized and prepares founders on business practices and culture, while also helping their families feel supported as they become comfortable in their new environment.
Intrinsic VC has worked with 12 companies to date (companies from Canada, China, Bangladesh, Iran, Eastern Europe and South America). Industries include robotics, AgTech, HealthTech, EduTech and FinTech.
Furthermore, Intrinsic has developed an online training program to help guide international start-up entrepreneurs in the innovation technology space as they start their businesses here. The training program provides an overview about important business practices and business culture in Canada.
Upon successful completion, founders will be equipped with the knowledge they need to establish a company in Canada, effectively navigate the Canadian business environment and successfully grow their business based on intrinsic knowledge on the specifics of business practices and business culture in Canada.
Why is the Partnership with the BVC Important?
The Business Venture Clinic is student-run free legal clinic whose success depends on the community. The relationships the Clinic fosters and maintains with its partners and clients provide workflow and allow the students the opportunity for hands-on experience. It is precisely these types of relationships that has helped the BLG Venture Clinic successfully operate for over a decade. The opportunity to work with Intrinsic Innovations opens a new door for not only this year’s students, but it also opens doors for new members of Calgary’s community. Practical experience as a law-student is invaluable, and what better way to gain it than by providing access to legal information for entrepreneurs!
Authored by Claire Standring
UCalgary Law | JD Candidate 2024
 “Intrinsic Innovations”, online: <www.intrinsicinnovations.ca> [Intrinsic Website].
 See ibid.
 See ibid.
Written by Chiara Lasquety
JD Candidate 2023 | UCalgary Law
Taken together, the general rule articulated in sections 9(1), 67, and 18(1)(a) of the Income Tax Act (the “ITA”) is that reasonable expenses associated with operating a business may be deducted against the income generated by that business. Such costs include not only all the ordinary operations costs but also moneys paid in the discharge of liabilities normally incurred in the operations. These expenses include amounts spent on employee salaries, rent, research and development, furniture and equipment, etc.
Note: The deduction of business losses under the ITA is optional, not mandatory. Accordingly, subsection 111(1)(a) of the ITA permits a corporation (or individual businessperson) to carry losses forward for twenty (20) years or applied back three (3) years.
An established, profitable company can immediately make use of the losses associated with the start-up costs of a new business. A newly formed corporation undertaking a new business is able to deduct its start-up expenses, but because it has no income the corporation gains no immediate tax savings from the deduction.
Other Permitted Deductions
Additionally, other permitted deductions under the ITA include, but are not limited to, the following:
In computing the income of a taxpayer from a business or property no deduction shall be made in respect of:
Additional Considerations re: Canadian Controlled Private Corporations (CCPCs)
A CCPC is simply a type of private corporation controlled by residents of Canada. Many businesses aim to be designated as a CCPC because of its advantages when it comes to tax reliefs, including a lower tax rate. A common strategy for small businesses is to use just enough of a year’s expenses to reduce a CCPC’s income to $500,000 in order to benefit from the special low tax rate – saving any remaining expenses for application against income in future years.
Flow-Through Taxation for Unincorporated Businesses
For unincorporated structures, such as partnerships and limited partnerships, losses may flow-through from the partnership to their partners, who can then use those losses to reduce their personal taxes.
As opposed to the limited deductions available to employees in reducing one’s taxable income, there are various deductions available for businesses to utilize under the ITA. For further information regarding any of the foregoing, or about tax considerations in structuring your enterprise generally, please contact the BLG Business Venture Clinic.
 Bryce C. Tingle, Start-up and Growth Companies in Canada: A Guide to Legal and Business Practice, 3rd ed (Toronto: LexisNexis Canada Inc., 2018) at 38.
 Income Tax Act, RSC 1985, c 1, s 111(1)(a) [ITA].
 Supra note 1.
 ITA, s 20(1)(c)(i); Shell Canada Ltd. v Canada,  3 S.C.R. 622.
 ITA, s 248(1)(d).
 ITA, s 18(12)(b).
 ITA, s 18(12)(c).
 Diana Grey, “What are Canadian-controlled private corporations (CCPC)?” (January 2021), online: Wealthsimple <https://www.wealthsimple.com/en-ca/learn/canada-controlled-private-corporations#what_is_a_ccpc>.
 Supra note 1.
Debt vs Equity Financing
By Shazaib Rashid, JD Candidate 2024 | UCalgary Law
Starting and growing a business requires a significant number of financial resources and is one of the most crucial aspects of achieving success is raising capital. Insufficient funding can hinder a business from taking off, sustaining operations, or competing effectively in its industry. As such, understanding financing options is an essential skill for any entrepreneur who wants to succeed in today's competitive marketplace.
As a startup, you have several financing options to consider, including debt and equity financing. The decision between the two can be challenging, as both have their advantages and drawbacks. Generally depending on multiple types of sources of capital will afford more flexibility and reduce expose to risks in financial markets.
In this blog, we will discuss the benefits and drawbacks of debt and equity, provide examples, and give considerations for when to use each one.
Debt financing involves borrowing money from a lender and paying it back with interest over a specific period. Examples of debt financing include business loans from banks, credit unions, or other financial institutions, merchant cash advances, personal loans, lines of credit.
Benefits of Debt Financing
Debt financing is an attractive option for startups that want to maintain ownership and control of their business. However, it is not ideal for long-term funding needs.
Equity financing involves selling ownership to investors in exchange for funding. Examples of equity financing include angel investments, venture capital investments, crowdfunding, initial public offerings.
Benefits of Equity Financing
Equity financing can be an attractive option for startups because it does not require repayment of the investment. However, it can be costly for the business.
Considerations for Choosing Debt or Equity Financing
When deciding between debt and equity financing, there are several considerations to keep in mind as these can significantly influence your decision when choosing between debt and equity financing. Some critical considerations are risk tolerance, funding needs, and growth potential.
In conclusion, raising capital is an essential aspect of starting and growing a business. With careful consideration and planning, you can make an informed decision that aligns with your goals and helps your business thrive.
 Bryce Tingle, Start-Up and Growth Companies in Canada, 3rd ed (Canada: LexisNexis, 2018) at 69.
 Ibid., at 70 – 73.
 Ibid., at 73 - 76
Blog posts are by students at the Business Venture Clinic. Student bios appear under each post.