Alberta Incorporation FAQ’s
Learn more about Alberta corporations by clicking on one of the links below.
What is a ‘limited’ corporation?
How is an Alberta limited corporation formed?
Incorporating in Alberta
Tax advantages of Alberta Corporations
Alberta Corporate Registry
Alberta Registries
Registering a business in Alberta
Incorporating a business in Alberta
Incorporation Alberta
Corporate Registry Alberta
Business Registrations Alberta
Incorporating a Company in Alberta
Alberta Business Registrations
Alberta Incorporation Form
Alberta Incorporation Kit
Alberta Incorporation Fee
Alberta Corporation Registration
Alberta Incorporation Act
Alberta Incorporation Name Search
Alberta Incorporation Minute Book
Alberta Incorporation Package
Alberta Incorporation Clases of Shares
Alberta Incorporation Online
Alberta Incorporation Number
Alberta Incorporation Annual Return
Alberta Corporation Articles of Incorporation
Alberta Incorporation Bylaws
Alberta Incorporation Benefits
Alberta Corporations are distinct from sole proprietorships and partnerships because of three special legal principles that apply only to corporations, and not to sole proprietorships or partnerships. These principles are separate legal entity, perpetual existence, and limited liability. You must understand each of these before you can understand the advantages and disadvantages of incorporating.
Separate legal entity
When it comes to corporations, the law plays a game of “let’s pretend.” The law pretends that a properly constituted corporation is an independent personality, separate and distinct from its incorporators.
This bears repeating: A corporation is recognized by the law as something altogether different and apart from the human beings who create it. It is every bit as real as they are as far as the law is concerned. This is so even though a corporation can’t do anything by itself. It has to have human beings to make it work.
The concept of separate legal entity is one of the great leaps of the legal imagination; perhaps the greatest, if you consider that without it, the world of modern business, with its giant multinational corporations, could not exist.
Perpetual existence
A corollary of separate legal identity is that a corporation has the potential to exist forever. The people who set it up will die, but that has no effect on the corporation. It will continue to exist as long as it is kept up-todate with Alberta Corporate Registry, or until it is closed down by those who control it.
Limited liability
The third principle relates to the need to give entrepreneurs protection from the costs of taking on new and potentially risky business ventures. As we have seen, sole proprietors and partners are fully liable for the costs they incur while doing business. If the business doesn’t have the money to pay, they are personally responsible for the entire amount. However, by creating the corporation — this new legal creature with separate identity and perpetual existence — those behind the corporation are sheltered by the law. Only the corporation is responsible for its business debts, and it can pay those only out of its own assets. The people who stand behind the corporation are not personally responsible to pay its bills if it can’t.
These three principles are at the foundation of any corporation, whether it be a oneor two-person business or a giant like General Motors. Together, they are the reason why the corporate form has become the preferred way of doing business in our economy.
