Why DIY Incorporation Can Cost You More Than You Think

Uncategorized May 08, 2025

You clicked a few buttons, paid a small fee, and voilà — you’re incorporated. Easy, right? That’s exactly what those online platforms want you to think. But behind the click-and-go convenience of DIY incorporation lies a minefield of missed steps, legal blind spots, and strategic mistakes that could cost you big in the long run.

I see it all the time in my law firm: smart, ambitious business owners unknowingly skipping vital legal foundations because the platform made it look like a done deal. The truth? Incorporation is just the beginning. And what you don't know can hurt you.

Mistake #1: Thinking Incorporation = Fully Set Up

Filing articles of incorporation is just step one. It’s the equivalent of registering your gym membership—it doesn't mean you know how to lift weights or have a plan. When you DIY your incorporation, you’re often left without:

A corporate minute book
Organisational resolutions
A shareholders agreement
Clear share structure and class rights

These aren’t just paperwork. They are your corporate operating system. Without them, your corporation is a shell—vulnerable, disorganised, and a potential legal and tax liability.

Mistake #2: Ignoring Shareholders Agreements

"But it’s just me and my partner—we’re aligned. We trust each other."

Cool. But what happens if someone wants out? If they get sick? If they die? If they ghost the business and stop doing their share of the work?

Shareholders agreements aren’t for when things go right. They’re for when things don’t. And online platforms don’t guide you through those tough conversations or offer context on what your agreement needs. I do. Because your business deserves protection, not just optimism.

Mistake #3: Skipping the Section 85 Rollover

If you’re a sole proprietor who’s grown your business and is finally ready to incorporate, congratulations—that’s a huge move. But did you know that if you incorporate without a proper Section 85 rollover, you could trigger immediate capital gains tax on the fair market value of your assets?

A Section 85 rollover is a critical legal and tax manoeuvre that allows you to transfer assets into your new corporation without paying tax at the time of transfer. Miss it, and you might be hit with a tax bill you weren’t expecting—something no one warns you about on DIY sites.

Mistake #4: Not Understanding Your Structure

Do you actually know how many classes of shares your corporation has? Do you know who owns what? What voting rights exist? What happens if you bring on an investor or want to sell?

Your share structure affects your taxes, your control, your growth, and your exit strategy. You can't afford to DIY something this important. Platforms won’t explain these things, but a lawyer who understands your business and your goals will.

Mistake #5: No Minute Book = No Receipts

Every major decision made by your corporation should be documented: appointments of directors, share issuances, changes to officers, and more. This documentation lives in your corporate minute book, which also needs to be available in case of audit or due diligence.

If you skip this? Your business might be non-compliant without even knowing it. And if you ever want to sell or get a loan? Good luck explaining that blank folder.

The Bottom Line: DIY Might Be Cheap Now, But It’s Expensive Later

I’m not here to scare you. I’m here to empower you. But true empowerment includes understanding the legal foundation you’re building on.

That’s why I created:

Incorporation Essentials: A flat-fee legal service that sets up your business properly from day one.
The Foundation Solution for Business Partners: Designed for partnerships, this service includes custom shareholders agreements, strategy sessions, and real clarity.
Incorporation Essentials + S. 85 Rollover: A flat fee legal service that rolls your sole proprietorship into a corporation and gets you ready for the next chapter of business growth with ease.

These aren’t just services—they’re sovereignty strategies.

Ready to Incorporate with Confidence?

Skip the shortcuts. Book a free 15-minute call with me and let’s make sure your business is built to last—on your terms.

DM me CORP or visit www.thesoulattorney.com to get started.

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This blog is intended for educational purposes only and is not legal advice. Always consult a licensed lawyer in your area for personalised legal guidance.