Carrying on a Business in Other Provinces and Territories
Ever wonder how to expand your business beyond its provincial borders? New entrepreneurs may be surprised to learn that they will not generally be able to carry on business in another province without first clearing some basic bureaucratic hurdles. Though the specifics will depend on several factors, including where a business was incorporated, where it will operate, and what kinds of business activities it will be carrying on, a province will most often require that a business register in that province in order to carry on business there.

The specific registration requirements and the definition of “carrying on business” will vary from province to province (the same is true of the territories) and may be affected by trade agreements such as the New West Partnership Trade Agreement between British Columbia, Alberta, Saskatchewan, and Manitoba.[1] In Alberta, for example, an extra-provincial corporation (a corporation incorporated outside of Alberta) is carrying on business and must, therefore, register if any of the following conditions apply:

• Its name, or any name under which it carries on business, is listed in a telephone directory   anywhere in Alberta;
• Its name, or any name under which it carries on business, appears or is announced in any advertisement in which an address in Alberta is given for the extra-provincial corporation;
• It has a resident agent, representative, warehouse, office, or place of business in Alberta;
• It solicits business in Alberta;
• It is the owner of an estate or has interest in land in Alberta;
• It is licensed or registered, or required to be licensed or registered, under any Act of Alberta allowing it to carry on business;
• It is, in respect of a public vehicle as defined in the Alberta Motor Transport Act, the holder of a certificate of registration under the Alberta Motor Vehicle Administration Act, unless it neither picks up nor delivers goods or passengers in Alberta;
• It is the holder of a certificate issued by the Alberta Motor Transport Board, unless it neither picks up nor delivers goods or passengers in Alberta;
• It otherwise carries on business in Alberta.[2]

 
One of the potential advantages of the extra-provincial registration process, especially for start-ups and new entrepreneurs, is that it allows a single business entity to operate across several provinces, rather than requiring the incorporation of a new business in each province. Incorporating in each province would mean managing several businesses and their filing requirements across multiple jurisdictions, whereas extra-provincial registration allows for the management of a single business entity in its home province with the only filing obligations in other provinces being the less onerous registration requirements, as specified by that province.

An additional consideration for entrepreneurs looking beyond their provincial boundaries is the use of their business’ name; a business incorporated in Alberta, even if properly registered as an extra-provincial corporation in another province, may not be able to operate under its name if there is already a business operating in that province with the same name or a similar name. If it is important that a business operate country-wide under the same name, federal incorporation may be a good option; though federal incorporation will generally involve more paperwork every year than provincial incorporation, it allows a company to conduct business under the same name across Canada, even if there is already a company operating in a province with that same name.[3]

For more information about federal incorporation, provincial incorporation, and extra-provincial registration requirements across the provinces and territories, visit the Government of Canada’s Business and Industry “Registering your business” page:
https://canadabusiness.ca/government/registering-your-business/#toc2

Aleksandar Kukolj is a member of the BLG Business Venture Clinic, and is a 3rd year student at the Faculty of Law, University of Calgary
 
References
[1] https://canadabusiness.ca/government/registering-your-business/#toc2
[2] https://www.servicealberta.ca/713.cfm#jm_versus
[3] https://www.thebalancesmb.com/provincial-versus-federal-2948230

Copyrights

Copyright is the sole right to produce or reproduce; publish or perform original literary; dramatic, musical or artistic works.[1] Essentially, it is the right to copy.  Copyright applies to all original content, provided the conditions of the Copyright Act are satisfied, regardless of whether the original owner has registered their copyright.[2] Therefore, copyright rights exist the second an author concludes their book, a software engineer finishes a block of code, or a choreographer completes their routine. Certificates of registration of copyright only act as evidence that copyright exists and that the person registered is the owner of the copyright. This can be particularly helpful as an owner may transfer ownership or license their work out to other individuals.[3] One thing to note is that the Canadian Copyright office does not perform “gatekeeping” functions.[4] What this means is that anyone can claim to be the owner of a piece of work. In Andrews v McHale and 1625531 Alberta Ltd. et al, 2016 FC 624,[5] an ex-employee was able to register copyright ownership of some of his ex-employers’ software, turned around and sued the company for copyright infringement.[6] Additionally, the Copyright office does not “police” and therefore, the onus is on the owner of the copyright to ensure that no one is infringing on their right to reproduce.

A challenge for many growth companies with regards to copyright is who owns of the software when the author is an employee. As established above, the general rule is that the author is the owner. However, an exception can be found in section 13(3) of the Copyright Act.[7] It states:
       “Where the author of a work was in the employment of some other person under a  contract of service or apprenticeship and the work was made in the course of his employment by that person, the person by whom the author was employed shall, in the absence of any agreement to the contrary, be the first owner of the copyright”
What this establishes is that if you own a company and hire a software engineer to write code, the code they wrote in the course of their employment would belong to your company, unless there was an “agreement to the contrary”. It is important to remember that this agreement does not have to be in writing, and in certain circumstances, like in an academic context – where professors are generally owners of their work regardless of their employment, creators ownership can be presumed.[8] Another interesting concern relating to copyright is an author’s moral rights.  Moral rights are an author’s right to maintain the integrity of the work and the right to be cited as its author. Even if the work is created under employment or their rights to ownership were waived through contract, their moral rights in their work cannot be assigned and are not automatically waived.[9]
In conclusion, this post is to give you a little taste of how copyright works in Canada and how it can apply to growth companies.

Tyler Anthony is a member of the BLG Business Venture Clinic, and is a 2rd year student at the Faculty of Law, University of Calgary.

References:
[1] Canadian Intellectual Property Office, A guide to copyright(Ottawa: Canadian Intellectual Property Office, 2018) <ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/wr03719.html?Open&wt_src=cipo-cpyrght-main/> accessed October 28, 2018
[2] Copyright Act,RSC 1985, C-42 [Copyright].
[3] Christopher Heer and Daryna Kutsyna, “Copyright FAQ” (13 August 2018), Heer Law (blog), online < https://www.heerlaw.com/copyright-faq/>.
[4] Richard Stobbe, “Ownership of Copyright in Software”, (21 September 2016), The Medium (blog), online < https://www.fieldlaw.com/portalresource/lookup/wosid/cp-base-4-7474/overrideFile.name=/Ownership_of_Copyright_in_Software.pdf/>. [Richard].
[5] Andrews v McHale and 1625531 Alberta Ltd, 2016 FC 624.
[6] Richard supra note 4.
[7] Copyright supra note 2 s.13(3)
[8] Jean-Sebastien Dupont and Guillaume Lavoie Ste-Marie, “Do you actually own the IP generated by your Canadian employees” (16 June 2016), Smart & Biggar Fetherstonhaugh (blog), online: <http://www.smart-biggar.ca/en/articles_detail.cfm?news_id=866/>.
[9] Ibid.

An Intro to Cooperatives
When you’re thinking about starting a business, one of the first legal decisions you have to make is what structure to use. Limited corporation, partnership, limited partnership, and sole proprietorship are the models traditionally considered. This post is about another option that makes sense in some circumstances, the cooperative corporation, or coop. Coops are a business structure option often discounted, and they don’t make sense in every situation. Where you have a group of people facing a common problem though, and your value proposition is deeply based on solving that problem and building the loyalty and participation of that group, a cooperative might be a good fit. Coops are especially good at meeting needs “that neither the market nor the public sector fulfill.”[1] Mountain Equipment Coop, for instance, was built as a consumer cooperative because it was designed to meet a niche retail need, and to serve those consumers. Similarly, the Coop grocery store was built as a response to a lack of good grocery and gas options, and so it made sense to build it as a cooperative to serve member needs. Stocksy United is a platform coop that provides stock photos and whose members are the photographers who take those photos. Those photographers being members rather than employees or contractors gives them an extra incentive to have the overall platform succeed. Coops also have a built in set of principles that they have to operate under as mandated by the legislation that help them fulfill this vision of people coming together to solve a problem or meet their or their community’s needs:

1. Voluntary and open membership
2. Democratic member control
3. Member economic participation
4. Autonomy and independence
5. Education, training, and information
6. Cooperation among cooperatives
7. Concern for community[2]

 
So, what exactly is a coop? At its base, it is a corporation that has members instead of shareholders, and that is democratically controlled by those members. Profits are generally shared amongst the members, often based on use of the coop’s services, rather than strictly by number of shares. However, this is alterable by share structure choices. The basic idea is that members own and control the business. So, who are members? There are four basic options[3]:

• Consumer coops: These are often retail, but they can also provide services in other areas, like housing, healthcare, or childcare. The members are the users of those services or the purchasers at the retail outlet.
  
• Worker coops: In these coops, the members are the workers themselves, so the business is worker owned and democratically worker controlled.
  
• Producer coops: These coops are often agricultural, but can also serve artisans, or other independent entrepreneurs, who are the coop’s members. The coop helps to market and sell the things that those members produce.
  
• Other or multi-stakeholder coops: These are coops with a diversity of kind of members, but who serve the needs of and are controlled by “employees, clients and other interested individuals and organizations.”[4]
  • Investment coops: These are a kind of multiple stakeholder coop that blends the line between investment vehicles and cooperatives, and are kind of multi-stakeholder coop. However, they keep the focus on democratic decision making, ensuring that each investor, which is a member, still only has one vote. They also keep the focus on returning profits to members.
    

 
Once you’ve decided what kind of coop you are going to make, you should make sure that you are thinking about the cooperative in a way that makes it successful. Coops can be really powerful vehicles to meet the needs of people and communities, and do so in a way that puts those needs, not profits, first. But in order to do that, coops have to have a viable business case - they must be financially feasible. A feasibility study or a business plan aren’t necessary to creating a coop, but thinking about those kinds of things is important before you create a coop.
 
The basic legal steps to create a coop are pretty similar to creating a corporation. You must file an articles of incorporation, a summary of those articles and statutory declaration, a notice of address form, a notice of directors, and an incorporation fee of $100. These documents have to specify what kind of cooperative you are creating. You also have to complete a NUANS search to make search that your name isn’t being used by somebody else already. Full details on this process in Alberta can be found here: https://www.servicealberta.ca/1041.cfm.
 
Once the articles are filed and the coop is incorporated, you must create bylaws for the cooperative. Bylaws for cooperatives are a little bit different from, and a little more complicated than, a set of bylaws for a shareholder corporation. The Albertan government has created a list of Cooperative Act sections that have to be complied with for every section of the bylaws, and that can be found here: https://www.servicealberta.ca/pdf/coop/Bylaw_Requirements.pdf.
 
For more help creating a coop, you can find a list of coop developers and professional service providers for coops here: http://www.coopzone.coop/developers/members/region/Alberta/.

Matt Hammer is a member of the BLG Business Venture Clinic, and is a 3rd year student at the Faculty of Law, University of Calgary.

References:
[1] https://canadabusiness.ca/blog/why-start-a-co-operative-1/
[2] https://localinvestingyyc.ca/
[3] https://canadabusiness.ca/blog/why-start-a-co-operative-1/
[4] https://canadabusiness.ca/blog/why-start-a-co-operative-1/