Canadian Companies and US Incorporation
For many start-ups in Canada being acquired by a larger company is a sound exit strategy, however that process can be complicated by ownership structures. Entrepreneur Carl Mercier has an excellent blog post on how to structure your Canadian company to be easily acquired by an American company. It seems almost too simple to believe.
Karabunga owned all the IP, the Defensio name, the trademarks, the code and the servers (in our case, EC2). Karabunga owned and controlled all the value.
QC-inc was a simple consulting firm that had only one client: Karabunga. Our employees, office, dev computers, ping-pong table and our infamous Dev1 development server all belonged to QC-inc. The idea is to keep both companies as independent as possible. If QC-inc went out of business for whatever reason, it would not have impacted Karabunga in any way (aside from losing all the employees). QC-inc also obeyed Quebec’s French-language laws such as Bill 101. Hopefully you don’t have that problem where you live.
Karabunga is the company we sold to Websense and the employees became Websense employees. I later dismantled QC-inc since it lost its only client and no longer had a purpose.
Read the full rundown on being a Canadian company incorporating in the states.