Index
Berne Convention 68, 128, 140, 191 business visit visa 49, 50 incorporation 51–2 Canada 32–4, 79–80 work permit 49, 50 Act Respecting the Legal Publicity company names 52 of Enterprises (Quebec) Charter of the French 36, 38, 39, 41, 47, 48 Language (Quebec) bankruptcy and dissolution 77 52, 73–4 Bankruptcy and Insolvency compliance 72 Act 77 consumer protection 76–7 BIA proposals 77–8 Consumer Protection Act 77 Companies’ Creditors cooperatives 45–6 Arrangement Act 77, consumer 45 78–9 incorporation 55 Winding-up and multi-stakeholder 46 Restructuring Act 77 priorities 46 business entities 35–6 producer 45–6 Business Immigration corporations 42–5 Programme advantages 45 self-employment 50, 51 Canada Business Start-up Visa Programme Corporations Act 42 50, 51 corporate name 42 Business Names Act 36, 38 directors’ duties 44–5 business survival rate 35 disadvantages 45 Charter of Rights and Freedoms distinct legal personality 42 75 federal incorporation 42, 43 Charter of the French Language incorporation under CBCA 48, 52, 73 54–5 company establishment 34–3, 49 incorporation under QBCA 2-6-2 Rule 35 54 business number 53 Ontario Business Corporations Canada 51–2 Corporations Act 42 incorporation 34 place of incorporation 43 NEC (Quebec) 53 provincial incorporation processing fees 53 42, 43 Registraire des entreprises 52 Quebec Business requirements of potential Corporations Act 42, investors 34–5 43–4 company establishment for registration 44 non-residents 49–50 share structures 45 bank accounts 56 shareholder protection 44
302
Alexandra Andhov - 9781839108457 Downloaded from Elgar Online at 09/30/2021 01:32:54PM via free access INDEX 303 entrepreneurship and innovation Privacy Act (BC) 72 33–4 provincial 70 environmental law 75–6 R&D platform 33 franchises 47–9 sole proprietorships 36–7 advantages 48 advantages 37 contracts 48 disadvantages 37 diversity 47–8 establishing 34 Quebec law 48 registration 55 regulation 48 tax planning 37 simplicity of 47 start-up environment 79 government 32 start-up funding 56 Immigration and Refugee angel investors 58 Protection Act 49 bootstrapping 56 industrial design 70 business incubators 62 IP protection 67–8 commercial finance compa- copyright 68 nies 61 patents 69–70 commercial lenders 60–61 signatory to Berne common stock 57 Convention 68 crowdfunding 62–3 trade marks 68–9 equity offerings 59 joint ventures 40–41 government grants/subsidies Quebec law 41 61–2 labour law 74–5 IPOs 59 languages 32, 72–4 love money 57 legal systems 32–3 SAFE 59–60 linguistic requirements 73–4 venture capital 57–8 OECD ranking 33 taxation 63–7 partnerships 37–40 deductibles 65–6 establishment 34 goods and services tax (GST) general 38 66–7 limited 39 income 64, 65 limited liability 39–40 Income Tax Act 63 Limited Partnership Act provincial rates 64 38, 39 Quebec sales tax (QST) 66–7 not separate legal entity 37 residence basis 63–4 Partnerships Act 38 trade agreements 33 provincial jurisdiction over trusts 46–7 38 advantages 47 Quebec law 38, 39 business 46–7 registration 38–9 no legal personality 46 taxation 37–8 regulation 47 undeclared 40 Trustee Act 47 population 32 work permits 49 privacy and data protection business visitor distinction 70–72 49 Charter of Human Rights exemptions 50 and Freedoms Labour Market Impact (Quebec) 72 Assessment 50 personal information 71 change Personal Information close connection to funding 13 Protection and constant 15, 18 Electronic Documents acknowledging 21–2 Act 71 as major feature of start-ups 14
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rapidity of 21–2 Copyright Act 143 see also innovation licensing 142–3 choosing corporate form 20 national treatment principle climate change 25, 28, 76 140–41 corporate law neighbouring rights 141 focus 11 payments 142 legal personality 10 scope 141 limited liability 10 territoriality principle 140 organizational choices 11 transfer 142 corporate governance 97, 98–9 decision-making mechanisms 22 Act on Approved Auditors Denmark 81 and Audit Firms 98 Act on Certain Commercial board liabilities 100 Enterprises 84 boards’ duties 99–100 101 business entities 83–4 Capital Markets Act 98 entrepreneurial companies Committee on Corporate 84–5 Governance 98–9 European company 84 EU Market Abuse Regulation limited partnership company 98 (partnerselskab) 84, 86 executive remuneration 99 private limited company financial 96 (anpartsselskab) 84, Financial Statements Act 98 85 foreign citizens as managers public limited company 101–2 (aktieselskab) 84, 85–6 corporate governance structures sole proprietorship (enkelt- 94–5 mandsvirksomhed) 84 central governing body 94 Companies Act 84 one-tier 94, 95 sec 108 148 supreme governing body 94 sec 119 148–9 traditional 94 sec 127 148 two-tier 94, 99–100, 101 company dissolution 148–50 currency 82–83 bankruptcy trustees 149 Danish Business Authority on insolvency 148–9 (Erhervsstyrelsen) 86 and IP 150 Danish Central Business company establishment 83 Register and 88 acquisition of shelf company Data Protection Agency 145 88 design 137–40 founders’ agreement 90–91 alternative protection initial capital 89–90 139–40 Memorandum/Articles of establishing priority date Association 89 139 online registration 88 individual character 139 paper registration 88 international design registra- shares 91–2 tion 138 company establishment for newness 139 non-citizens 86–7 registered Danish design CPR number 87 protection 138 NemID 87 registered EU design 138 visa requirements 86–7 unitary character require- copyright 140–43 ment 138–9 automatic protection princi- unregistered EU design 138 ple 140 economy 82
Alexandra Andhov - 9781839108457 Downloaded from Elgar Online at 09/30/2021 01:32:54PM via free access INDEX 305 employment law 102–4 population 81 applicability 102 protection of personal data see categories of employees 103 EU, GDPR employee equity compensa- shareholders rights 91–2 tion 106 start-up environment 150–51 employee protection 103–4 accelerator/incubator pro- employee representation 108 grammes 150 employees’ inventions 107 growth 150 employment status 104–5 key industries 151 freedom of contract 102 start-up funding 108–9 income tax 106 accelerators 113 laws 102–3 107 alternatives 110–11 non-compete covenants 107 angel investors 114–15, 118 trades unions 107–8 bootstrapping 111–12 EU membership 82 business plan 109–10 Financial Supervisory Authority common stock 117 98 convertible loan notes 117 government 81–2 crowdfunding 113–14 IP protection 126 145 debt financing 116 Appeal Board for Patents grants 112 and Trademarks 144 IPOs 116 copyright see copyright personal 112–13 above SAFE 118 data compilations 143–4 venture capital 115, 118, 119 design see design above taxation 119 domain names 136–7 of all income 120 enforcement 144–5 business activity 120–21 intellectual property rights deductibles 121 127–8 expenses 125, 126 legislation 137 high burden 83 patents see patents below limited liability company signatory to Berne 122–3 Convention 141 marginal level 121 trade marks see trade marks non-deductibles 125–6 below R&D relief 124–5 trade secrets 132–3 sole-trader-scheme 122 utility model protection VAT 123–4 (brugsmodeller) trade marks 133 131–2 distinctiveness 133 languages 81 EU harmonization 135 minority shareholder protection EU TM application 134 92–3 Madrid system 134 operational liabilities 148 Marketing Act protection patents 128–31 135–6 application 128 protection 134 EPO applications 129, registration 134 130–31 unregistered 135 importance of vesting 95–6 non-disclosure of cliff 96 invention 130 graded 96 inventive step 129–30 immediate 95 novelty requirement 129 see also EU time 128–9
Alexandra Andhov - 9781839108457 Downloaded from Elgar Online at 09/30/2021 01:32:54PM via free access 306 START-UP LAW elements of start-ups and collaboration 24–7 change 14 and constant change 15 fast growth tendency 13 diffusion of 27 funding 13–14 emerging through social innovation 12–13 interaction 26–7 interrelation of 14–15 encouraging 26–7 newness 12 Global Innovation Index 2018 see also change; innovation 201 EU 15 incremental 26 -Canada Comprehensive Innovation Authority (Israel) 153, Economic and Trade 180, 182, 199 Agreement (CETA) 50 Innovation Canada 61 Court of Justice 124, 128 multi-faceted nature of 25 Directive (EU) 2016/943 (trade public innovation centres secrets) 128, 132, 133 (Denmark) 112 EUREKA 200 radical 26 European company 84 scope of 12 European Economic Area 86 structures promoting 25 Eurozone 82–3 and sustainability 24, 27–9 GDPR 145–6 technological 22–3, 27 Art 4 146 see also change Art 5 146 intellectual property see individual Art 6 146 countries Art 9 146 internal governance structures 21–2 Art 10 146 IP protection see individual countries consent in 147–8 Israel 152–3, 200 data controller/data proces- 3-tier court system 154–5 sor distinction 146–7 Basic Law: Freedom of definition of personal data Occupation 171, 175 146 Basic Law: Human Dignity and Horizon 2020 181 200 Freedom 171 Intellectual Property Office 144 Commercial Torts Law 190 IP protection Companies Law 156, 159, 183 copyright 140 mergers 183–4 datasets 143 company establishment 155–6 EU collective marks 137 articles of association 166 EU design 138–9 authorized signatory 168 EU trade mark 134, 135 bank accounts 164–5 Market Abuse Regulation 98 choice of entity 158–9 Patents Office 144 financial statements 167 start-up environment 16 founders’ agreement 165 general manager 167 First Industrial Revolution 1760–1850 indication of limited liability 14, 25 167 initial directors’ declaration 166 G20 Strategy for Global Trade Growth initial shareholders 168–9 17 proposed names 166 registration 165–6 history of corporations 10–11 share capital 167 statement of purpose 166 innovation 3, 12–13, 24 corporate governance and advancement 12 accounts 163
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audits 163–4 signatory to Berne board of directors 161–2 Convention 191 company organs 156, 159 trade marks 192 distributions 163 trade secrets 190–91 general meetings 160, 161 Trademarks Ordinance minority shareholder protec- (1972) 192 tion 162–3 legal system 153–4 shareholder liabilities limited liability company 155 159–60 liquidation 196–7 shareholders 156, 159–61 court-ordered 196 corporate legal personality 159 court-supervised 196 division of power 159 fees 198 employee protection 171–3 procedure 196–7 Annual Leave Law (1951) reorganization 196 171 taxation 198 collective labour agreements voluntary 196 172 non-compete agreements 175–7 employer–employee rela- limitations 176 tionship 172 non-profit associations 156 Hours of Work and Rest Law non-solicitation agreements 177 (1951) 171 operational liabilities labour courts 172–3 compliance 194 Notice to Employee exculpation of office holders Law (Terms of 194–5 Employment) (2002) indemnification of office 171 holders 195 Severance Pay Law (1963) insurance 195 171 risk assessment 194 terms of employment 172 partnerships Wage Protection Law (1958) general partnerships 155, 171 158 employment case law 176–7 limited partnerships 155, employment remuneration under 158 Patents Law 175 Partnership Ordinance 158 Encouragement of Capital pass-through entity for tax Investment Law 187–8 purposes 159 equity-based pay 173–4 registration 158 employee stock ownership Property Relations between plans 173 Spouses Law (1973) 177 fiduciary duties prenuptial agreements care 169–70 177–8 loyalty 170–71 wills 178 government 152 public companies 157 Innovation Authority 153, 199 Securities Law (1968) 156 IP protection 190 sole proprietorship 155–6 copyright 191 start-up environment 152, 198 Copyright Law (2007) 174 academic research 199 designs 193 acceleration programmes licensing agreements 193–4 199 patents 192–3 cultural 200 Patents Law (1967) 174, 193 funding see start-up funding service inventions 174–5 below
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government support SMEs 199–200 defining 17 investment 152–3 economic importance of 15–16 multinationals 200 G20 Strategy for Global Trade repurchase of founders’ Growth 17 shares 164 neglect of 16 support 200 /start-up relationship 17 start-up funding 178–9, 199 start-ups as category of 17 bootstrapping 179 /start-ups distinguished 11, 17 crowdfunding 181–3 and sustainable growth 16–17 debt 180 start-up economy equity 179–80 competitiveness link 2 government 180–81 ecosystem 2–3 mergers and acquisitions growth 2 183–4 national economic development taxation link 2–3, 29–30 capital gains tax 172, 173, scope 2 185 Startup Genome 2 corporate tax 159, 187 start-up funding 56 dividends 185–6 angel investors 58, 114–15, 118, excise tax 186 220, 274 income tax 173 184 bootstrapping 56, 111–12, 179 Income Tax Ordinance business incubators 62 (1961) 173, 184, 198 commercial finance companies 61 income tax treaties 189–90 commercial lenders 60–61 interest 186 common stock 57, 117 non-residents 188 crowdfunding 62–3, 113–14, non-resident capital gains 181–3, 216–19, 271–2 exemptions 189 advantages of 62 shareholder tax 159 authorization 219 tax breaks 187–8 crowdinvesting 217 VAT 187 crowdlending 217 -US BIRD initiative 181 crowddonating 217 crowdsupporting 217 jurisdictions covered 6–7 donation-based 113–14 equity 62–3, 114 FundRazr 62 Law of start-up companies project GoFundMe 62, 272 4–6 IndieGoGo 113, 272 Kickstarter 62, 113, 272 micro-enterprise 17 pre-purchase 113 MNE domination of transboundary qualified investors 181 trade 16 registration 63 reward-based 113 Paris Convention for the Protection equity offerings 59 of Industrial Property 192, 193, government grants/subsidies 229 61–2 pro-entrepreneurial regulatory IPOs 59 environment 24 love money 57 SAFE 59–60, 118, 274–5 venture capital 15, 57–8, 118, rationale for book 3–4 119, 220–21, 270–71, regulatory compliance experts 19 272–3 reputational intermediaries 19
Alexandra Andhov - 9781839108457 Downloaded from Elgar Online at 09/30/2021 01:32:54PM via free access INDEX 309 start-up law 18–19 employee protection 210, 212 importance of 9–10 employment lawyers’ objectives consultants 210 acknowledging constant within partnerships 210–11 change 21–2 Federal Act against Unfair understanding technology Competition 211, 224 22–2 Federal Act on Patents for understanding vision 19–21 Inventions 229–30 start-ups financial environment 242 change 14 government 202–3 definitions 12 insurance 233 elements of see elements of AHV 234, 237 start-ups BVG 235, 237 as initiators of innovation and compliance 237–8 development 14 policies 234–7 life cycle 109 UVG 236, 237 ownership dilution 117–19 IP protection 224 /SMEs distinguished 11 copyright 226–7 as specific types of entity 9, 11, 18 employee inventions 213 sustainability Federal Act on Copyright attention to 28–9 and Related Rights and technology 27–9 226 UN Goals 28 Federal Act on the Protection UNCTAD EPF 28–9 of Trademarks 228 Switzerland 201 241–2 Institute for Intellectual Anti-Money Laundering Act Property 228 (1997) 205, 211 licensing agreements 231–2 Code against Unfair Competition non-compete clauses 213–14 Art 4 225 patents 229–31 Art 5 225 trade marks 228–9 Code of Obligations 209, 213, trade secrets 224–6 224 TRIPs signatory 224–5 on death of shareholder 214 languages 201 company dissolution 238 liability fees 239–40 civil 211 procedure 238–9 criminal 211 spin-offs 240 licences 233 tax 240 limited liability company time 239 (GmbH/Sàrl/Sagl/LLC) company establishment 204–5 204 bank accounts 204–5 member of the Financial Action Register of Commerce 204 Task Force 205 company limited by shares (AG/ Official Gazette of Commerce SA/LTD) 204 partnership cost of living 203–4 entrepreneurial groups Criminal Code 211, 224 209–10 art 162 226 risk assessment 233 art 273 226 sole proprietorship 205, 209 culture 203 establishing legal entity 209 economy 201 no legal personality 205 employee equity compensation no limitation of liability 205 profit-sharing 213 start-up environment 241 stock option 212 resources 242–4
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start-up funding 216 Chapter 11 296–7, 298 angel investors 220 Chapter 13 297, 298 crowdfunding 216–19 business entities 247 family offices 220 business operation 293–4 industrial partners 220 compliance management institutional 220 293, 294 venture capital 220–21 insurance 294 succession planning Civil Rights Act Title VII 267 foundations 215–16 closely held corporation 249, 269 prenuptial agreements 215 company dissolution 295–7 shareholder’s death 214–15 bankruptcy see bankruptcy wills 215 above taxation 202, 221, 224 procedure 295–6 company profits 222 company establishment 246–7 double taxation treaties 223 incorporation 246–7 individual income 221–2 copyright 289–90 R&D relief 223 automatic attachment Tax Reform and Alters- 289–90 und Hinterlassenen duration 289 versicherung (AHV) corporate governance 260–62 Financing 221 board of directors 261–2 VAT 222–3 business judgement rule 263 conflict of interest 264 transaction cost engineers 19 fiduciary duties 260, 261 TRIPS Agreement (1994) 128, 141, care 262–3 190, 191, 224–5 loyalty 262, 264 officers 262 corporations 251–3, 255–6 UN C Corp 252 2030 Agenda for Sustainable company by-laws 253–4, 255 Development 28 voting 255–6 UNCTAD 24 Delaware 251 Entrepreneurship Policy future debt 259–60 Framework 28–9 incorporation 252–3 uncertainty 18, 21 joint and several liability in customer bases 21 251–2 eliminating 141 S Corp 252 in market externalities 21 small business 252 patent applications 131 stock in taxation 118, 239 common 257 United States 245–6 preferred 257–8 acquisitions purchase agreements due diligence 276 257 representations 276–7 taxation 252 warranties 276–7 as uniquely suited to bankruptcy 296 start-ups 251 Chapter 7 individual 297 vesting 256–7 Chapter 13 individual 297 employees Chapter 11 298 employment status 265 complete bankruptcy 296 equity compensation 264–5 costs 298 /independent contractor reorganization 296–7 differentiation 265, Bankruptcy Code 266–7 Chapter 7 296, 297, 298
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severance agreements 267 design 288 under contract 267 utility 287–8 at will 267 shareholders employment agreements drag along provi- Americans with Disabilities sions 255–6, 270 Act 267, 268 majority 250, 255–6, 259, Fair Labor Standards Act 262, 269 265–6, 268 minority protection 258–9, Family and Medical Leave 269 Act 267–8 sole proprietorship 246, 247 JOBS Act 271–2 start-up ecosystem 245, 298–9, exiting company 284–6 300–301 asset purchase 284, 285 accelerator programmes 298 merger 284, 285 beta testers 299 stock purchase 284, 285 first users 299 financial planning 268–70 incubator programmes 298 prenuptial agreements innovation and disruption 268–9 atmosphere 300–301 shareholder agreements 268 potential investors 299 wills 269 research environment indemnity 270 299–300 independent contractors talent acquisition 299 300 /employee differentiation world ranking 245 298 265, 266–7 start-up funding 270–75 employment status 266 angel investors 274 IP protection 286–7 bank loan 271 California Consumer Privacy convertible notes 273–4 Act (2018) 293 crowdfunding 271–2 copyright see copyright SAFE 274–5 above Series Seed 275 Patent and Trademark Office Small Business Association 287 loan 271 patents see patents below venture capital 270–71, service marks 290 272–3 trade marks see trade marks taxation 277–8 below acquisitions 275, 276–7 trade secrets 292–3 active income 279 -Israel BIRD initiative 181 basis 278 legal framework 245 business 281 limited liability corporation business operators 279 250–51 corporations 280–81 liability 251 formation 283 manager managed 250 operations 283–4 member managed 250 deductions 260 Operating Agreement 250 fair market value 278–9 National Labor Relations Act income 266 267, 268 Internal Revenue Code 278 partnerships on liquidation 286 general 247–8 LLC 279–80, 282–3 joint and several liability 248 non-resident aliens 279 limited 248–9 partnerships 179–80, 282–3 limited liability 249 passive income 279 patents permanent residents 279
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R&D tax credit 286 duration 292 realization 278 trade dress 290 recognition 278 trade names 290–92 treaties 279 trade marks 290–92 WIPO Agreement 191 definition 290 World Trade Organization 192, 225
Alexandra Andhov - 9781839108457 Downloaded from Elgar Online at 09/30/2021 01:32:54PM via free access