A likely question an entrepreneur may ask themselves early in their venture is “how do I protect the directors of my company?”  They may (or perhaps should) think about this because in all likelihood, they will be one of, if not the only director of their business during its early phases following incorporation. Please note: this post assumes that the company in question is incorporated under the Business Corporations Act of Alberta
 
Indemnifying Directors
Indemnification refers to one party’s agreement to secure another against responsibility for their actions, or to give security for the reimbursement of a person in case of an anticipated loss[1].  In this case, it refers to a corporation’s agreement to make a director whole, should they be subject to legal proceedings as a result of their actions in their capacity as a director of the corporation.
 
Generally speaking, the Business Corporations Act (the Act) allows corporations to indemnify their directors for both legal costs incurred, as well as any monetary damages that arise from a director’s conduct in relation to the business.  In order to benefit from such indemnification, a director must have “acted honestly and in good faith with a view to the best interests of the corporation[2].”
 
An Alberta corporation is not permitted to indemnify its directors for their actions if they have not acted honestly and in good faith with a view to the best interests of the corporation – that is, if they have breached their fiduciary duty to the corporation.  If a director has breached his or her fiduciary duties to the corporation, any indemnity the corporation has offered will be void.
 
The scope of conduct that may be indemnified under the Act is very broad.  Section 124(1) of the Act states:
“…a corporation may indemnify a director or officer of the corporation, a former director or officer of the corporation…against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the director or officer in respect of any civil, criminal, or administrative action or proceeding to which the director or officer is made a party by reason of being or having been a director of that corporation or body corporate…”
 
When Are Directors Entitled to Indemnification?
In Alberta, a director is only entitled to indemnification by the corporation for all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment in a civil context if they (i) were substantially successful in defending the claim; (ii) acted honestly and in good faith with a view to the best interest of the corporation; and (iii) is fairly and reasonably entitled to indemnity[3].

A corporation that does not contain indemnity provisions in its by-laws will still be liable for any loss incurred so long as these criteria are met. If indemnification provisions found in either the corporation’s by-laws, or in an agreement between the corporation and a director impose mandatory indemnification, it will of course be liable to do so.
 
How to Indemnify Directors
Indemnification provisions can be found within a corporation’s by-laws.  If a corporation seeks to provide its directors with a wide range of protection, these provisions do not need to be particularly robust.  Any attempt to predict the types of conduct or liabilities that the corporation anticipates indemnifying its directors against may simply limit its ability to protect its directors.
 
If the company’s bylaws do not provide indemnification provisions that are acceptable to a potential director, indemnification provisions may be included within a written agreement between the corporation and the director.  This method provides the greatest flexibility as each agreement can be tailored to suit the needs of both the corporation and the individual director.
 
Some things that indemnification provisions should contemplate include whether the corporation is required, or simply permitted to indemnify its directors (and in which circumstances), the timing of indemnity payments, and out of court settlement.  Indemnification provisions that do not require the corporation to indemnify its directors should also consider a mechanism to oblige the corporation to do so such as arbitration.
 
Corporations that provide the widest range of indemnity to their directors often simply state in its indemnification provisions that the corporation must indemnify the director to the greatest extent authorized under the relevant law.  Where it is desirable to minimize the short-term financial impact of litigation on directors, indemnity provisions may require the corporation to advance defence costs as they are incurred.  Such provisions should also contemplate whether the corporation is required to indemnify the director for out of court settlements, as opposed to simply court judgments.

What Indemnification Provisions Do Not Cover
Indemnification provisions do not cover directors’ actions when they are not made in good faith with a view to the best interests of the corporation. 

In cases where a director is being sued by the corporation or its shareholders, including in derivative actions, a corporation may only indemnify a director for their legal expenses.  This leaves directors exposed to liability for corporate or shareholder damages arising from their action (or inaction as the case may be).  Why is this? Most derivative actions against directors include a claim for breach of fiduciary duty.  If this claim is successful, and a breach has been found, a director will have been found not to have acted in good faith with a view to the best interests of the corporation, and indemnity would not be available in any event.
 
Hamish Gray is a member of the BLG Business Venture Clinic and is a third-year law student at the Faculty of Law, University of Calgary. 

REFERENCES:
[1] Black’s Law Journal; 2nd ed; online, <a href="https://thelawdictionary.org/indemnify/" title="INDEMNIFY">INDEMNIFY</a>
[2] Business Corporations Act, RSA 2000 cB-9 s124 [the Act]
[3] Act supra note 2 s124(3)

CALGARY's START-UP COMMUNITY: AN OUTLINE OF SERVICES AND SUPPORT
INTRODUCTION
Calgary has many resources and opportunities to support entrepreneurs at all stages in their ventures’ development. Community supports exists for all the hurdles that growing ventures must overcome, whether your business is at the conceptual stage and you need help getting it off the ground, or your venture is growing fast and you need advice or support with bringing employees onboard, marketing your product or service, or finding the right investors. This blog post provides a non-exhaustive rundown of places and services in Calgary that can support entrepreneurs on their journey..
 
RESOURCES FOR STUDENTS
School provides a unique opportunity to learn theory and develop skills across a variety of disciplines, and to network and collaborate with like-minded people, in and out of the classroom.  While these opportunities can help students come up with novel and creative business ideas, often a little more help is needed to take an idea from concept to reality. Many post secondary institutions in Calgary provide resources to help students get their ideas off the ground.

• Hunter Hub

The Hunter Hub for Entrepreneurial Thinking at the University of Calgary has many regularly scheduled and special events for budding entrepreneurs. The Hub offers Touch Down Tuesdays, where students can get drop-in support from experts in business and innovation. Hunter Hub also offers a Summer Incubator program that runs from May to September each year and provides selected graduate students with the resources and training needed to grow their start-up. In November, Hunter Hub celebrates Global Entrepreneurship Week, bringing together aspiring entrepreneurs and innovators to celebrate and share ideas. And of course, the weekly drop-in legal clinic hosted by the BLG Business Venture Clinic on Friday mornings is a great place to get information on issues like intellectual property, business incorporation, employment agreements and much more. Click here to learn more about Hunter Hub.

• WannaB Wednesdays

Bow Valley College hosts bi-monthly ‘Lunch and Learns’ that teach attendees how to tackle many of the problems facing entrepreneurs. Over a free lunch, participants learn about how to generate revenue, choose the right business name, set themselves apart from their competitors and most effectively reach their target market.  Although spaces are reserved for Bow Valley students until three days before each session, any remaining spots are open to the public at no cost. Two weeks after the event, participants apply the tools they have learned by helping a social start-up or struggling social entrepreneur solve a problem they are facing. Find out more here.

• 150 Startups

150 Startups is a province-wide entrepreneurship development program for post-secondary students. Over the course of the program, students have the opportunity to develop, validate, and launch their ventures, as well as collaborate with each other, and compete for cash and prizes in a series of challenges. Lean more here.
 
COWORKING SPACES
In addition to providing a means to keep overhead costs down and maintain flexibility in the early stages of a company’s growth, coworking spaces allow entrepreneurs to connect with one another, sharing skills, costs, connections and ideas. There are many coworking spaces across the city, forming a diverse range of entrepreneurial communities.

• Infusion Coworking

Infusion Coworking is conveniently located downtown. Infusion integrates its members and itself into the broader start-up community by establishing networks with key partners in the city, and with university, private, and venture capital organizations. Infusion offers several different levels of membership, which offer technological amenities like conferencing and AV services, and facility perks such as bike storage, 24-hour access and security, and free coffee and tea. Also available are business consulting services, weekly development programs, and community building events with strategic contacts such as investors and tech specialists. Just need a place to work for a day? They’ve got that too.

• ​Work Nicer

With three locations in inner-city Calgary and one in downtown Edmonton, Work Nicer is Alberta’s largest coworking community. In addition to the basics like mail handling, meeting rooms and printing services, Work Nicer also has perks like pet-friendly areas, beer on tap, and fitness facilities. Work Nicer’s credo is that no one succeeds alone. To that end, the organization carefully curates its membership to bring together people with complementary strengths and a desire to help each other, fostering innovation, and keep costs down, and letting each entrepreneur spend more time focusing on the work that really matters.

• Fuse 33 Makerspace

Fuse 33 Makerspace in southeast Calgary caters to the hands-on creative crowd, providing access to hand and power tools, welding equipment, sewing and electronics labs, embroidery machines and 3D printing. Weekly workshops and certification classes ensure users can operate equipment safely and effectively. Fuse 33 is open seven days per week, so work can be done whenever it’s convenient, and some membership plans even offer temporary storage, guaranteeing projects that can’t be finished all at once remain safe between sessions.

• Trico Changemakers

The Trico Changemakers Studio at Mount Royal University is a coworking and learning space for social entrepreneurs, innovators, activists and artists. Members of the co-working space include entrepreneurs within the for-profit and non-profit sectors who are driving change through innovative products, services and business models. Entrepreneurs can engage with the Studio community to broaden their networks and learn more about applying their skills and passions toward positive, sustainable change across multiple sectors. The space also regularly hosts events for the social entrepreneurship communities of Calgary and beyond. The Trico Changemakers Studio is the combined effort of the Institute for Community Prosperity, the Institute for Innovation and Entrepreneurship and the Bissett School of Business at MRU. Click here to learn more, and join their newsletter for regular event updates.
 
FOR THE LADIES

• Chic Geek

Chic Geek is a non-profit organization with a mission to create a welcoming environment for women at the intersection of technology and entrepreneurship. This is done in several ways. Chic Geek facilitates a mentorship program, and hosts events and workshops that allow participants to connect with experts and the community at large, learning about topics like coding and robotic process automation. There is also an annual ‘Geeky Summit’, featuring speakers with expertise in engineering, blockchain, media, finance and more. Learn how you can get involved here.

• YYC Girl Gang

Girl Gang connects female small business owners, providing an avenue to network and share skills, stories and support. Girl Gang hosts 6 events and 6 workshops per year, alternating each month. Previous themes include how to collaborate with influencers to use social media as a business tool, bookkeeping, and how to price your products. There’s just enough time to sign up for the  Tax Tips for Sole Proprietors workshop on April 16th.
 
MORE RESOURCES

• Platform Calgary

Platform Calgary, formerly known as Calgary Technologies Inc., aims to put a focus on innovation in downtown Calgary. Along with the new name comes a new location at the Hillier Block in East Village. Platform Calgary is working to make innovation more accessible, by providing access to space, programs, mentorship and capital. It welcomes first-time entrepreneurs and established companies alike, ensuring innovators have access to the coaching and resources needed at all stages of their business. Platform Calgary works with the University of Calgary, the Calgary Chamber of Commerce and the City of Calgary, building strategic partnerships and leveraging the city’s entrepreneurial drive.
 
Nothing in this post quite right for you? Don’t worry, there’s more. Click here and here for more extensive lists of resources, events, spaces, meetup groups, and accelerator programs  Getting to know the community is the best way to identify which spaces and programs can provide the advice, support, people or partnerships to elevate your business.

Lastly, please remember that the BLG Business Venture Clinic is always happy to help. Fill out a request form here and we will get in touch to find out how we can help.

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

So, You’re Ready to Incorporate You’re Business: Where to Start.
You’ve had a great idea for some time. You’ve considered it deeply. You’ve made a business plan, and now it’s time to turn your dream into a reality. But where to start?
There are a variety of forms a business can take, but the corporate structure has tended to predominate for start-ups in Canada. [1] There is a good chance therefor you might settle on the corporate form for your new business. This post will not consider the pros and cons of different business structures. If you would like information that could help you choose a business structure, please contact the BLG Business Venture Clinic (the “Clinic”). [2] Incorporation, particularly in Alberta, is the subject of this writing. The purpose of this post is to shine light on resources that can help get you started and raise important considerations.
Free Resources
There are many free resources available online. It is important to ensure the information you find is trustworthy before relying on it to make business or legal decisions. The BLG Business Venture Clinic does not certify the correctness of the information in the resources that follow.
The Government of Canada provides a “Business Start-up Checklist” which offers a wide variety of information, including direction to provincial and territorial business registration resources. [3] The business registration information is separated by province and territory. [4] This is important because a business can be incorporated in a province, a territory, or at the federal level. The Government of Alberta offers information on registry costs and categorizes registries by services offered. [5] To find a business registry that offers incorporation services in your area, registry locations can be searched by city or town. [6]
Before you head to your local registry, there are a number of steps and information to gather. The Government of Alberta provides a list of steps to incorporate a business in the province. [7] They are as follows:

1. Choose a business name,
2. Get a NUANS Report,
3. Complete the forms or otherwise collect the information you will need for incorporation, and
4. Take your incorporation information, NUANS report, and fee to an authorized service provider. [8]

Information explaining each step is provided on the webpage. [9] Incorporation forms are also provided by the Government of Alberta. [10]
Considerations
An entrepreneur could use the resources above, pay the NUANS report and incorporation fees and successfully incorporate a business in Alberta. The incorporation documents discussed are the legal foundation of a business and considerable thought should go into drafting their substance. For example, in the articles of incorporation or an appendix thereto, the drafter can add desired provisions. A provision in the articles can allow the board of directors to increase the number of directors by up to one third (1/3) of those elected at the last annual general meeting. [11] This increase can remain in effect until the following annual general meeting. [12]
Another consideration is, “[t]he securities law regime in Canada requires that certain restrictions on the transfer of shares be included in the articles of a company if certain exemptions from prospectus and registration rules are to be available.” [13] One of these exemptions is the “private issuer” exemption which “is one of the easiest and least complicated to use in the very early stages of a growth company’s financing.” [14]
Aside from the documents discussed above, a corporation should consider having by-laws ready to sign upon incorporation. The by-laws of a corporation deal with a variety of internal elements including processes, powers, and roles. Ensuring a corporation has by-laws in place from the start can avoid uncertainty and potential issues. There are boiler-plate by-laws available online, but they often are ill suited to a particular corporation. Certain boiler-plate provisions “will be removed as a condition of any future financing.” [15] They should be avoided at the outset instead of requiring amendment later. Aside from issues to avoid, the by-laws should be drafted to appropriately reflect the needs of the corporation. This means including the right provisions and the correct balance of powers.
Conclusion  
Resources are available to incorporate a business on ones own. There are however considerations and drafting of language that may warrant the services of a lawyer. Finances are often tight during the start-up phase and it may be tempting to avoid the cost of legal fees. However, there are options that may help control costs. The BLG Business Venture Clinic is one resource that can help do just that. The Clinic offers free legal assistance, provided by law students. The assistance offered includes drafting of documents discussed in this post and the writing of memos on specific issues or questions a business might have. It is recommended that clients of the Clinic have the work reviewed by a lawyer. A review of prepared documents should however cost less than having a lawyer draft the documents themselves.
 
Neil Thomas 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] Bryce C. Tingle, Start-up and Growth Companies in Canada: A Guide to Legal and Business Practices, 3rd ed (Canada: LexisNexis Canada Inc, 2018) p 58 [Tingle].
[2] University of Calgary, “We’re here to help – Contact us!” (2017), online: BLG Business Venture Clinic <thttp://www.businessventureclinic.ca/contact.html >.
[3] Government of Canada, “Business Start-up Checklist” (September 28, 2018), online: Government of Canada <https://canadabusiness.ca/starting/checklists-and-guides-for-starting-a-business/business-start-up-checklist/>.
[4] Ibid.
[5] Government of Alberta, “Find a business registry” (2019), online: Alberta <https://www.alberta.ca/find-business-registry.aspx>.
[6] Government of Alberta, “Level 2: advanced registrations” (2018), online: Alberta <http://servicealberta.ca/Find-a-business-advanced-registrations.cfm>.
[7] Government of Alberta, “Alberta Corporations” (2018), online: Alberta <https://www.servicealberta.ca/712.cfm>.
[8] Ibid.
[9] Ibid.
[10] Government of Alberta, “Incorporation forms” (2019), online: Alberta <https://www.alberta.ca/incorporation-forms.aspx>.
[11] Business Corporations Act (Alberta), RSA 2000, c B-9, s 106(4).
[12] Ibid.
[13] Tingle Supra note 1 at p 63.
[14] Tingle Ibid; Prospectus and Registration Exemptions – Consolidated Version for Periods Relating to Financial Years Beginning Before January 1, 2011, NI 45-106, s 2.4.
[15] Tingle Ibid.