There are different ways to form a business in Alberta, each with its own advantages and disadvantages. Companies can officially incorporate, or they can register as a sole proprietorship or a partnership. The decision to incorporate depends on the specific needs of the persons involved and the goals of the company.
Companies are incorporated in Alberta according to the provisions of the Alberta Business Corporations Act.
When a company is incorporated, it acquires all of the powers of an individual, as well as an independent existence – separate and distinct from its shareholders – and an unlimited life expectancy. In other words, the act of incorporation gives life to a legal entity known as the corporation, commonly referred to as a “company”. A company can acquire assets, go into debt, enter into contracts, sue or be sued.
Compared to registering a sole proprietorship or a partnership, incorporating a company includes higher startup costs related to professional fees for legal and accounting services. Carrying on business as a company will increase the number of filings you are required to make with the Corporate Registry. For instance, the Business Corporations Act requires all companies to file an annual report and also to file any changes to the location of the company offices and its directors. The company is also required to maintain certain corporate records.
STEPS TO INCORPORATING A COMPANY IN ALBERTA
To incorporate a company in Alberta., one or more persons (called “the incorporators”) may form a company by completing the following steps:
- Request name approval and reservation;
- Establish your company’s articles;
- Prepare an incorporation agreement;
- File an Incorporation Application; and
- Keep documents as part of your company’s records
STEP 1: REQUEST A NUANS REPORT
If the company intends to use a specific name, that name must be approved by the Alberta Registries Office. This is to ensure the company’s name can be distinguished from the names of other incorporated companies and that the name meets specific guidelines established by the registrar of companies.
Approval of a name by the registrar for the incorporation of a business does not provide a proprietary right or interest in the name. The approval is solely intended to prevent names of incorporated businesses from being so similar as to confuse or mislead the public.
This means another business operating in Alberta or elsewhere, that is not incorporated or registered with the Corporate Registry could use the same or similar name as your business.
If it is important to protect your name outside Alberta, or from any other unregistered or unincorporated business in Alberta, then you should contact Industry Canada for information on trademarks.
The Alberta NUANS name reservation is for a period of 56 days. The other steps in the incorporation process must be completed and the Incorporation Application must be electronically filed before the 56 day period ends.
A company can also choose to use as its name, the incorporation number of the company followed by “A.B. Ltd.” (“0123456 A.B. Ltd.” for example). If you choose to use the incorporation number as the company’s name, you do not need a name approval and reservation. The incorporation number is assigned by the Alberta Registries Office at the time the Incorporation Application is electronically filed with the Corporate Registry.
STEP 2: ESTABLISH YOUR COMPANY’S ARTICLES
Every Alberta company must have a set of articles. The company’s articles are the rules that govern the conduct of the company and its shareholders, directors, and officers.
For small companies, namely, those that have only one shareholder or where the officers are all family members, the standard Articles prescribed in the Business Corporations Regulation is usually a suitable set of articles.
The articles must be kept by the company as part of the company’s records.
STEP 3: FILE AN INCORPORATION APPLICATION
The next step in the process of incorporating a company is to file an Incorporation Application with the Alberta Registries Office.
STEP 4: KEEP DOCUMENTS AS PART OF YOUR COMPANY’S RECORDS
After you have filed the Incorporation Application and the company is incorporated, the Alberta Registries office will send you the original Certificate of Incorporation, a certified copy of the Incorporation Application and a certified copy of the Notice of Articles. These documents must be kept by the company as part of the company’s records.
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