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14 October 2025

Beyond Startups: Next Steps For Established Businesses

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Fillmore Riley

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Fillmore Riley is a highly regarded and accomplished full-service Manitoba law firm. Since 1883, our lawyers have been entrusted to work on some of the most complex and sophisticated transactions and litigation involving Canada’s most prominent companies, institutions and individuals. As a result, market sources routinely recommend our lawyers for our proficiency in banking and finance, securities, taxation, real estate and property development and litigation. We advise a wide range of public and private sector clients, including large and small corporations, financial institutions, major national insurers, municipalities and professional organizations and associations on their mission-critical business transactions and commercial litigation. Fillmore Riley also advises individuals on their wills, trusts and estates, tax, family law and civil litigation matters.
If you're a business owner, you know it's not uncommon to sprint to get a new business off the ground.
Canada Corporate/Commercial Law
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If you're a business owner, you know it's not uncommon to sprint to get a new business off the ground. However, in all the excitement, it is easy to overlook legal requirements that may be critical to protecting your business and limiting complications down the line.

If you have weathered the startup phase and achieved a more stable footing, it may be the perfect time to step back and assess whether the current path of your business aligns with your long-term business goals.

Are Your Business Records in Good Order?

A good starting point for this assessment is to consider the current state of your business records. It is crucial that all businesses adopt an effective record-keeping system. The business structure (e.g. sole proprietor, partnership, corporation) that you have chosen will partly dictate the kinds of records that you are required to maintain. For example, The Corporations Act (Manitoba) requires corporations to prepare and maintain certain records, including:

  • the articles and the bylaws, and any amendments to them;
  • a copy of the Unanimous Shareholders Agreement (if any);
  • the minutes of meetings and resolutions of shareholders;
  • a register of the directors;
  • a securities register;
  • adequate accounting records; and
  • records containing minutes of meetings and resolutions of the directors and of any committee of directors.

These records should also contain the initial resolution of the shareholders and their subsequent annual resolutions. These annual resolutions capture important decisions of the corporation, such as the election of directors and the appointment or waiver of an auditor, and also confirm that the corporation has complied with the legal requirements imposed upon it by the Act, including presenting the financial statements to its shareholders.

When a business is just getting off the ground and is owned by close family or friends, some legal requirements may be viewed as non-essential technicalities that are then postponed due to time or budgetary constraints. However, neglecting to maintain proper legal and financial records from the outset can result in avoidable costs and unwelcome surprises down the line, often at critical junctures.

Established businesses should consider how inadequate record-keeping may impact their growth and succession planning. As a business evolves, there may come a time when the owners may desire to bring in additional owners or even sell the business entirely. These types of transactions will involve a thorough review of the business's records to confirm various key details—such as whether shares were properly issued and transferred throughout the years. Opportunities to sell may also arise suddenly, often with tight timelines imposed by potential buyers. If the due diligence process reveals inaccurate or outdated records, these unexpected issues may delay the transaction or potentially jeopardize it entirely. To mitigate these risks, businesses should consider seeking legal assistance to help identify and rectify any omissions that may have occurred during the start-up phase.

Business Governance

Organizing and maintaining clear business records not only facilitates growth and succession planning but may also strengthen day-to-day governance and efficiency. Established businesses should assess how familiar their team is with their organizational documents, such as the articles of incorporation, bylaws, unanimous shareholders' agreement, or partnership agreement.

When getting the business off the ground, standard form agreements may be economical and sufficient for the business's purpose at the time. However, what might have worked with a small start-up business may no longer be appropriate for a business in the growth stage.

For example, organizational documents may legally require a certain number of days' notice to be provided in advance of meetings of directors, shareholders, or partners, but these standard timelines may not be tailored to the business's needs and quickly become unrealistic for proper governance. Therefore, a business may wish to consider increasing the notice requirements to provide additional time for the relevant individuals to prepare prior to a meeting; alternatively, the timeframe may actually need to be reduced to improve the efficiency of the decision-making process. It is important to note that some notice timelines are prescribed by law and cannot be varied except in accordance with the relevant laws.

Additionally, if your business is no longer composed solely of family and friends, or if there is more at stake, you may also want to ensure that the decision-making process aligns with your business's needs. The organizational documents of a corporation may legally restrict the number of directors who can be appointed to the board, despite the corporation having grown significantly. The bylaws may also permit the chairman of the meeting to have a "casting vote" or "second vote," which permits them to break a tie vote. You should consider whether this tie-breaking process makes sense in the governance context of your business.

With turnover in the business and new ownership, it is essential to ensure that the owners' expectations for business management are both clear and realistic. For example, a corporation with multiple shareholders may want to consider whether a unanimous shareholder agreement could help clarify these expectations. This form of agreement can address a wide variety of matters, including share transfer restrictions, treatment and repayment of shareholder loans, as well as specific governance and decision-making requirements.

For more information, please see our article on "How Unanimous Shareholder Agreements Establish Clear Frameworks for Corporate Governance." Similar matters may also be addressed for partnerships by amending and modernizing the partnership agreement.

Revisiting Contracts with Customers and Vendors

As important as it is to consider the organization of the business, it is equally critical to consider the agreements that the business has with its suppliers, customers, and other external contacts.

Due to limited funds and resources, startups often lack contracts or adequate provisions in their contracts to protect their interests. As a business gains traction, it is important to evaluate whether (new or additional) contracts need to be implemented and whether any current form of agreement the business uses with its customers needs to be revised to suit the business's current circumstances. Some examples include the following:

  • Contracts with customers. A business may initially commit to certain service standards, but as it grows and takes on more customers, it may no longer be able to maintain these standards. Growing businesses may experience scaling issues, resource constraints, or shifts in their priorities. The business may, accordingly, consider (as one option) letting existing contracts expire and then phase those customers into new contracts with modified service standards.
  • Contracts with vendors. For businesses that rely on vendors to deliver their goods/services, these businesses may need additional vendors to meet market demand, or they may need to change vendors due to cost considerations or the new vendor's ability to meet the increasing demand. Vendors may have different quality standards, turnaround times, and service level commitments, which a business should consider when drafting contracts with customers. Correspondingly, new customers may have specific requirements that the business needs to pass on to the vendor.
  • Scope of liability. Limitations of liability and allocation of risk in contracts may need to be reconsidered in light of changes to the business's circumstances, including changes in bargaining power, resources, and perceived risks.

It is essential to have contracts in place that not only protect you but also help you reach the next stage of growth.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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