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I am currently employed by a large Canadian corporation. I'm also in the planning stages of bootstrapping my own small company. The two are in unrelated industries, but it could be argued that there is a crossover of my technical skills. I would, however, not be using technical skills learned at my employer.

If I claim Sole Proprietorship finances on my T1 & T2125, or if I incorporate and file a corporate T2, will my current employer be notified of this? If they did regular searches on their employees to see if they have any of the above, would it show up?

I don't really understand the corporate obligations RE starting your own side company. I am scared to ask the HR department about it incase it raises a 'red flag' so to speak.

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    If you have to keep something a secret from your employer, then something is wrong. Assume they will find out. I'd consider it unethical to keep information from them if you think they would have a problem with it. – JohnFx Apr 24 '12 at 1:22
  • To echo JoeTaxpayer, Great answer! As another perspective on the matter, if OP Tom doesn't disclose his startup to his employer, then suspicions are definitely going to aroused that some hanky-panky went on, maybe proprietary design manuals were copied and taken home for use in the new venture, and patents that the new small company tries to get are likely to be challenged on the grounds tha they are the intellectual property of the current employer, having been developed while working on the employer's time if not using the employer's tools, computers, e-mail accounts, etc. Be careful. – Dilip Sarwate Apr 24 '12 at 2:19
  • Thanks for the answers so far, I do see where you are coming from but I am scared that if I tell the employer that they will just turn round and say no, dispite no conflict of interest that I can see... That's the thing though, it would be done entirely on my own time using my own resources and tools. If my employer says "no" then that means I am stuck and cannot persue any ventures in my own time at all? I hear of people having private ventures on the side all the time, is this then generally frowned upon? – Tom Apr 24 '12 at 2:32
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    That's why you don't ask them. You tell them. If you have good legal standing and it won't affect your work then it shouldn't be an issue. – JohnFx Apr 24 '12 at 3:21
  • After an evening and early morning of further research on the matter, along with a double-check of my contract, I think I will go ahead and let them know. At the very least I will ask them if I need to let them know. My contract specifically states that Executives and Officers need to inform the company only if there is a potential conflict of interest. With that in mind, it seems like I do not need to tell them as I am neither in that kind of role, nor do I have a conflict of interest. And to be honest, that just makes me want to tell them even more, to keep the air clear so to speak. :) – Tom Apr 24 '12 at 11:16
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Tell your employer during your initial contract Terms of Service discussions. Ordinarily, this is boilerplate but you should ask for a rider in your contract which says - in some form - I already have IP, I will continue to work on this IP in my own time, and any benefit or opportunity derived from this IP will continue to be entirely mine.

I requested exactly such a rider when I took up a new job just over a year ago and my employer was extremely accommodating. That I already had a company in which that IP could reside actually made the process easier.

As @JohnFX has already mentioned, not telling your employer is both unethical as well as storing up potential legal hassles for you in the futre.

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I can see why you'd be reluctant to tell them, but I think you need to be open and honest with them about what you're doing and where you see it going.

If the roles were reversed, what would you want your employee to do in this situation? If it were me, I'd be much happier to be told up front than to find out some other way later. If I found out later, I'd feel somewhat betrayed and angry.

With the Internet, it seems unlikely that they wouldn't find out eventually, so I think being up front about it is your best option.

I also suggest you have a backup plan in case they say no. Perhaps you'd need to find another full-time job that is more tolerant (or even encouraging) of side businesses.

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I would have thought that if you are doing it in your own time using your own resources it really has nothing to do with your current employer, so there is really no need at all to keep it from them. By being open and transperant you might even get some business from your work mates.

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Some governments offer business information search for corporations in their jurisdiction. The search results may show the director information for the company.

If this information is made publicly available, keep in mind there are websites that make money from indexing publicly available information to show in Google search results.

I don't mean to scare you as this is a likely a slim possibility. It really depends on the privacy practices in place at the jurisdiction you're in. But do keep in mind if you're planning on doing business on the side for a few years policies may change.

I would call Service Ontario (or whichever province you're incorporating in) or Corporations Canada if federally incorporating and ask them if they offer a business search service and exactly what information they make public. You might be able to reach a Privacy Officer and find out what exactly their policy is.

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