Lawyers for Incorporating a Business in Alberta
By incorporating your business, you make the organization a legal entity that is separate from its shareholders and employees. We can incorporate your business federally under the Canada Business Corporations Act or provincially under Alberta’s Business Corporations Act. Like a person, a corporation can:
- Pay taxes on its own account
- Sue or be sued
- Sell, own, and buy assets
- Create and enforce contracts
There are several benefits to incorporating your business. Not only are corporations taxed differently than individuals, but by incorporating, an individual’s business and personal obligations are separated. Subject to certain exceptional circumstances, the liability of investors in a corporation is limited to the value of the investor’s investment. We recommend speaking with a lawyer as well as a tax advisor prior to making the decision to incorporate. They can go through the benefits and drawbacks of incorporating and help you determine how to select a jurisdiction and structure your corporation.
This is a major business decision, and legal counsel can ensure you’re doing this correctly. While you don’t need to be a large business to incorporate, it is not always an appropriate option for all businesses. Our team of experienced corporate lawyers can review your situation and help you decide if this is a suitable structure for your business.
If you decide to incorporate your business, our team will walk you through every step of the process. This starts with giving you a clear sense of costs, timelines, and workflows. Once the incorporation is complete, you will have the option of continuing to work with KMSC Law on periodic corporate maintenance. Every year, an Alberta corporation is required to file an annual return to update the government registry with current information regarding the shareholders and directors of the corporation. In addition to filing an annual return, each corporation is required by law to maintain minutes of meetings and resolutions of shareholders. These legal requirements are often overlooked in self maintained records and when the need comes to update, it can be costly and time sensitive. We pride ourselves on being long-term business counsel to hundreds of businesses across Alberta.
Starting your own business can be an exciting but risky venture and small business owners are faced with the decision of whether or not to incorporate their company. While incorporation initially requires some time, paperwork and set up costs, it offers important legal and tax advantages.
A corporation is its own distinct legal entity, and accordingly, can help shield you from personal liability. Although as a shareholder or director, you will still have certain duties and obligations, a corporation provides a layer of protection that makes it more difficult for creditors to go after your personal assets if the business defaults on its debts, faces bankruptcy or runs into other financial hardships.
In addition, as a corporation is its own separate entity, it can offer considerable estate planning benefits. The corporation will continue to live even after the death of a shareholder or director, which means it can be a useful tool in planning how to transfer your assets to others.
Operating your business through a corporation may result in substantial long term financial benefits such as lower tax rates and potentially easier access to capital and wider ranges of investment options.
To determine if incorporation the right decision for your company, consultation with a lawyer is highly recommended.
Incorporating a Company in Alberta
How do I choose my business name?
Choosing the name of your business is an important task that requires several considerations, including some legislative requirements. A corporation name in Alberta must have:
- A distinctive element which distinguishes your business from others;
- A descriptive element which explains what your business does;
- A legal element at the end of the name as permitted by the Business Corporations Act, or other relevant legislation. This may include the legal elements such as “Limited”, “Ltd.”, or “Corporation”, to name a few; and
- A name that does not include any prohibited words, expressions or affiliations.
Your lawyer can help determine if your chosen name meets all legislative requirements. Your lawyer can also help you conduct the requisite Alberta NUANS search to make sure that there are no other corporations with a name that is identical or too similar to your desired name and can then help file your business name with the appropriate Registries.
Documents and Information Needed for Incorporation
There are several other required documents in order to file for incorporation. These include:
- Articles of Incorporation – these are a set of documents that contain information about the company – including proposed corporation name, address, classes of shares and the maximum number of shares the corporation is authorized to issue, names of incorporators, and any rules or provisions. This information becomes public record.
- Notice of Address – This is a record of your corporation address. This must be filed to show the address of both the registered and records address, if they are different.
- Notice of Directors – A corporation has at least one director, which you will elect or appoint in this set of documents. Directors must be adults, and the board of directors must be one quarter Canadian residents.
Submitting Corporation Application
You will also have an opportunity to register your company extra-provincially in British Columbia and/or Saskatchewan and Manitoba through the New West Partnership Trade Agreement, if you plan to carry on business in one of these provinces. Once you have signed the incorporation forms, our corporate team will have the incorporation filed at the relevant Alberta corporate registry. By working with an experienced incorporation lawyer, you’ll remove the concern that your application isn’t complete and accurate. Our team of business lawyers are able to review your goals and give you tailored advice that will benefit you and your business.
Incorporating a Federal Company
The corporate law team at KMSC also performs federal (Canada) incorporations which allows a corporation to carry on business in all provinces and territories. Federal companies have minimal director residency requirements as well as additional obligations with regards to the ultimate beneficiaries of the company’s shares. It can be a more advantageous option if you anticipate your business’ operations expanding into other provinces.
Our experienced business lawyers can help you choose between an Alberta corporation and a federal company. Please contact us if you have any questions.