Your Early Access to Law School for Entrepreneurs (You’re Welcome)
Master Law School In 5 minutes
This week I’m teaching a class at my local co-working space, I’m calling Law School for Entrepreneurs, and because you’re a Loophole reader, you get it first. Consider this your advance copy before it goes to the wider group.
Law School by Force. You’re welcome. Leave it to Sonya to suck you into her pain and suffering.
My core message is simple: every entrepreneur needs to understand the basics of business law, and the most important question you’ll ever ask isn’t “do I need a lawyer?” It’s when do I need one, and when can I actually handle this myself?
We’re going to figure that out together, live, in the room, with some audience participation that will hopefully prove to you that you already know more than you think you do, and also that there are a few things you definitely don’t know yet. That second part is why you’re coming.
How the Class Works
We’ll move through four lessons together, but before I talk at you, I’m going to ask you a question first. We’ll start with some pop quizzes because if I had to suffer from pop quizzes in law school, so do you. I mean, actually, no, there weren’t really any pop quizzes, but those exams for 100% credit? I’ll spare you.
Lesson One: Business Structure
Before we dive in, your warm-up quiz:
True or false: If your business gets sued, your personal assets, like your house and savings, are automatically protected.
True
False
(The answer is false, unless you’ve incorporated. We’re going to talk about why.)
Application: What structure is your business currently operating under?
Sole proprietorship
Corporation
Partnership
Honestly not sure
(If “honestly not sure” wins, we are going to have a very productive few minutes together.)
Business structure is how your business is set up in the eyes of the government and, more practically, what is at risk if something goes wrong. That risk is what lawyers call liability.
In Canada, there are essentially two options.
A sole proprietorship is the default, and if you have ever exchanged a service or product for money, congratulations, you’ve had one this whole time. The CRA treats that income as personal income, taxed at your personal rate.
A corporation is different. It separates your personal assets from your business assets, which matters enormously if your business ever faces a lawsuit or a creditor. Any liabilities belong to the corporation, not to you personally. On the tax side, corporations let you defer income, draw on it later, and benefit from small business tax rates that are lower than personal rates. If you’re earning more than you need to live on right now, that difference is real money.
How to DIY: You can research the difference between a sole proprietorship and a corporation on your own, but the decision about which one makes sense for your specific income, risk level, and goals is worth a one-time conversation with a lawyer or an accountant.
Lesson Two: Contracts
Before we dive in, your quiz questions:
True or false: if you and a client agreed to terms over email but never signed a formal contract, there is no binding agreement between you.
True
False
(Also false. An email exchange where both parties agreed to the same thing can absolutely be a legally binding contract. Surprise!)
Application: Does your business currently have written contracts in place?
Yes, for everything
Yes, for some things
No, but I know I should
Wait, do I have contracts?
When most people picture a contract, they see a forty-page document full of “whereas” and “hereinafter.” Those exist. They’re valid. But a contract can also be a napkin scribble, a text message, an email chain, a template downloaded from the internet, or a verbal agreement where two people said yes to the same thing. None of those are ideal, but all of them can be legally binding.
The expensive mistake isn’t signing a bad contract. It’s believing you have no contract when you do.
Common contracts in a service-based business include
client service agreements,
independent contractor agreements,
employment agreements,
shareholder agreements if there’s more than one person running things,
statements of work,
membership agreements, and
waivers for higher-risk offerings.
That list is not as scary as it looks. Most of you need two or three of those, not all of them.
The cost comparison is worth sitting with. A lawyer-drafted or lawyer-reviewed contract typically costs between $700 and $3,000 as a flat fee. A contract dispute, even one where you are entirely in the right, starts at around $5,000 in legal fees and can reach $25,000 or more. Those are not worst-case numbers. That is typical.
How to DIY: A downloaded template is maybe fine for low-stakes, straightforward work, but if a contract governs a significant amount of money, an ongoing relationship, or something you’d be devastated to lose, have a lawyer look at it before you sign or send.
Lesson Three: Intellectual Property
Before we dive in, let’s test you:
True or false: If you created it, you own it, and no one can use it without your permission.
True
False
(Mostly true, but with a catch: if you contracted that right away, it belongs to someone else. And if you’re using someone else’s work without a licence, “I didn’t know” won’t protect you. Both of those come up more than you’d think.)
Application: Have you ever checked whether your business name is trademarked by someone else?
Yes, and I’m clear
Yes, and it was a stressful afternoon
No, but I’m nervous now
What’s a trademark?
IP is everything you create that has value: the words you write, the art you make, a process you’ve developed, a logo, a Reel. The law is designed so that you retain the benefits of what you create, unless you contract them away.
Protections include trademarks, copyright, and confidentiality agreements, also called NDAs.
The most common IP mistake I see is a business operating under a name for years before checking whether anyone else has a prior claim to it. You can search the Canadian Intellectual Property Office trademark database for free, and it takes about five minutes. Doing that search before you build more brand equity on a name you don’t own is a very worthwhile five minutes. I have watched people cry over this. Do the five minutes.
Businesses also need to be aware of other people’s IP. Using someone else’s creative work without a licence, whether it’s an image, a piece of writing, or a process, can result in a cease and desist letter or a lawsuit, and “I didn’t know” is not a legal defence.
How to DIY: You can run the CIPO trademark search yourself for free, and you should, but if someone else has a claim to your name or you want to register your own trademark, that process is worth doing with a lawyer, so it’s filed the first time correctly.
Lesson Four: Compliance
Before we dive in, take this test:
True or false: A privacy policy is only legally required if you’re running a large business or collecting sensitive information like credit card numbers.
True
False
(False. If you have a website, an email list, or any system that stores client information, Canadian privacy law applies to you regardless of how small your business is or what kind of information you collect.)
Application: Does your website currently have a privacy policy?
Yes
Yes, but I copied it from somewhere and haven’t read it
No
What’s a privacy policy?
Compliance is the lesson that most solopreneurs know the least about, partly because it isn’t something you go looking for, and partly because discovering there are rules governing your business that you didn’t know existed can feel overwhelming. It’s okay. Take a breath. This is fixable.
In Canada, any business collecting personal data is subject to PIPEDA, the Personal Information Protection and Electronic Documents Act. If you have a website, an email list, or any system that stores client information, this applies to you.
Basic employment law applies the moment you hire anyone. The Employment Standards Act, 2000 sets minimum workplace rights in Ontario, including wages, hours, overtime, vacation, and leave. The Ontario Consumer Protection Act protects consumers from unfair practices and gives them rights around misrepresentation, cancellations, and cooling-off periods for certain contracts.
For most solopreneurs, the most visible gap is a missing or inadequate privacy policy. If you collect emails, take payments, or use cookies on your site, you are legally required to have a privacy policy and terms and conditions. A good template can get this done in under an hour.
How to DIY: A reputable privacy policy template will get most solopreneurs where they need to be, but if you’re collecting sensitive client data, running a membership, or operating in a regulated industry, a lawyer should review what you have before a regulator does.
Your Homework (We’re Doing This Together)
Before you leave class, take out your phone. Go to the Canadian Intellectual Property Office website and search for your business name. This takes three minutes, and you will either feel relieved or very motivated, and both are useful outcomes.
After that, here are the four things to do this week:
Get your contracts in writing. Think through every relationship in your business and make sure there is something in writing for each one. Start with your client services agreement. Even a simple one-page template is better than nothing.
Understand your business structure. If you don’t know what you’re operating under, find out. The decision isn’t permanent, but the longer you wait to change it, the more complicated the transition tends to be.
Set up a basic privacy policy. If you have a website and collect emails, this is not optional. With the right template, it can be done in under an hour.
Build a relationship with a lawyer before you need one. Even a short consultation for peace of mind is worthwhile. A good lawyer will tell you when you don’t need anything, and will flag the one area that is actually high risk. That’s what the conversation is for.
WooHoo! You did it! I can’t give you an official degree, as I’m not accredited, but please accept this gold star as yours: 🌟
You’re a little smarter now. Go run your business legally.
Thanks for your kind attention. Class dismissed.
Build Smart,
Sonya