GABBY is a financial planner for a large privately-held investment firm.  GABBY is also a 'techie' and finds a gap in the market and has an idea for a new product.  GABBY wants to create her own business to develop and sell her product.   To obtain capital, GABBY uses part of her own money and contributions from her spouse, AMIN, who also owns a start-up technology company.  GABBY wants to run the day-to-day operations and lead the business. KRISTA wants to be involved but wants some oversight on GABBY's behaviour.  Other directors include MARKO, JULES, FLO, and HAN.   JULES is especially concerned that she may be sued for overseeing GABBY's new venture. 

GABBY quits her job to focus on the business, but at the start, the business does not earn any revenue.  To earn income, GABBY works as a freelance consultant.  GABBY is hired by MALCOLM's firm to do some research and to draft a report.  However, both GABBY and MALCOLM do not want the relationship to become permanent.  

GABBY goes to the bank (BANK of BANKNESS) and wants to get a loan.  BANK of BANKNESS wants to take security in her personal house and her investments and have someone guarantee the loan. GABBY's spouse, AMIN, signs the loan, not realizing what he signed.  

GABBY wants to protect her idea and product so that no one else can create or manufacturer it.  She wants to protect the firm's name (GABBYCO), the logo, the product itself, the look and feel of the product, and all marketing material.   GABBY has hired CHEN, an expert designer and engineer, to design the product.   GABBY is concerned that with everything going on globally.  She needs to protect herself, her business, and CHEN should something happen.  

GABBY uses some of the start-up funds to hire an external firm to market the product and search for a production facility site.  She hires an agency, SUPERMARKETING Inc., to create promotional materials and a search agency to look for a property to lease or purchase.   However, SUPERMARKETING  Inc. goes beyond its mandate and signs a lease on behalf of GABBY.   

GABBY needs to get additional financing, so she asks a few friends to invest.   OMURA and ELIZABETH want to invest, but GABBY wants to keep control, especially on important business matters.  She wants more power for each business decision than OMURA, ELIZABETH, AMIN, and other potential investors.  

GABBY successfully creates a working product and wants to sell the product to the public.   GABBYCO has several orders and wants to ensure that it is paying its suppliers.   GABBYCO claims that its product is better than anything currently on the market and compares it to other firms. GABBY's product will be sold mainly online, but he sources materials from contractors in the United States and overseas.   These companies want assurances that GABBYCO is a legitimate business and will pay for the order.  GABBY also wants assurances that suppliers are legitimate and will deliver the correct materials. 

GABBY's business starts to do very well, but he needs to work with another firm (DOMINANT Ltd.) to co-develop an enhancement to her product. However, unfortunately, DOMINANT Ltd., a large multinational corporation, starts to take advantage of its size and changes the product's prices to reflect their near-monopoly.  

KRISTA's business, on the other hand, is not doing so well.  The COVID outbreak has slowed her sales considerably, and she has had to lay off several employees.   She is concerned that the government funding does not apply to her and that she will not be able to pay her bills next month and may have to close the business.  She is looking for all options, including merging with GABBYCO or DOMINANT Ltd. KRISTA would prefer to sell her interest in GABBYCO but is unsure how to do it.  

GABBY, AMIN, and KRISTA are all very excited about their entrepreneurial adventures but have questions.   

Questions:  (Choose 6 of the 7)

1. GABBY is considering incorporating.  Assist GABBY with the pros and cons of each type of business organization.  Next, help GABBYCO create the needed types of shares (their typical rights and privileges) and prevent liability issues for the new directors' GABBY, OMURA, and ELIZABETH. Would a shareholders agreement make sense for GABBY, OMURA and ELIZABETH?  
2. Help GABBY and AMIN.  Compare letters of credit with bills of lading and general security agreements and discuss this type of financing arrangement's requirements.  How does the PPSA resolve conflicts when more than one debtor claims a security interest in the same collateral as the debtor?  What risks does AMIN face by signing a loan she did not intend to sign?  Would this change if the loan was in the form of a mortgage on GABBY's and AMIN's house?
3. GABBY wants to ensure SUPERMARKETING markets and sells the product properly. However, if GABBY's products are designed for children, how can she effectively manage its exposure to legal risks?  
4. Help GABBYCO protect its online business. Describe how the provinces and the federal government typically regulate online/e-commerce sales.   What are some gaps in the law for online activities? 
5. Help GABBY protect her IP.  Identify the elements that determine the patentability of GABBY's product and the pros and cons of patenting, should GABBY not want to patent the invention yet. 
6. GABBY wants to protect the jingles, songs and slogans SUPER MARKETING creates.  Identify and describe the copyright and trademark issues GABBY and GABBYCO faces.