Starting a Business in Canada

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Aug 23, 2011 - 3 minute read - legal

How To Incorporate a Business In Alberta

This post is about registering a provincial corporation in Alberta (For the difference between a federal and a provincial corporation see our previous blog post). There are a number of advantages to a federal corporation. If you plan on doing business in other provinces, you should strongly consider federal incorporation.

The first step to registering your business as an Alberta provincial corporation is to see if the name you have chosen for your business is available. You cannot name your Alberta corporation the same name as an existing Alberta corporation.

Unless you choose to have your company given a numbered name (known as a “numbered company”, ie. 1234567 Alberta Ltd.) you will need to conduct an NUANS (Newly Upgraded Automated Name Search). For a federal corporation this can be done online through Industry Canada’s website, but for a provincial corporation you should use an Alberta based search provider. A list of online NUANS name search service providers can be found here. The cost for this name search will be about $25 but the price may vary as service providers add their own fees on top of the government’s fees for providing this service. This search is only good for 90 days so don’t do it too far in advance of submitting your Articles of Incorporation.

Corporation Structure

After naming your corporation, the next step is to decide on a corporate structure. This is one of the most complex parts of incorporating. A corporation that isn’t set up properly at the beginning can create problems down the road. You have to make decisions regarding:

  • Share structure
  • Any restrictions on the transfer of shares between different parties
  • The number of directors in the corporation
  • Any restrictions on the type of business that the corporation may conduct
  • Any other rules or provisions that you wish to include

Corporation Type

There are three types of corporations. They are distinguished by the number of shareholders and the way shares are bought and sold.

  1. The most basic form of corporation has 15 or fewer shareholders and shares are not publicly traded. This is the category most small businesses will fit into.
  2. Corporations with 16 or more shareholders but who do not sell shares to the general public have extra regulatory requirements. They must comply with specific provisions of the Business Corporations Act.
  3. Corporations with 16 or more shareholders that do distribute shares to the general public are subject to an even higher level of regulation where they must file documentation with the Alberta Securities Commission.

Consider Using A Lawyer

While it is possible to incorporate your business by yourself, unless you have a lot of experience in this, I wouldn’t recommend it. Filing the Articles of Incorporation is easy enough but creating good documents that include all of the information you need can be very difficult for a layperson. I recommend hiring a lawyer to do this for you (You can search for a lawyer here.) Lawyer’s fees are normally worth the expense because doing things right at the beginning can save you a lot of money later on.

If you are on a tight budget and don’t feel you can afford the fees, I recommend using a service like Legal They won’t give you service and advice tailored to your personal situation like a lawyer would but they’ll give you a good set of basic documents. A lawyer or an online incorporation service can also do the name search for you.

Incorporating a company can seem like a big, complicated process if you’ve never done it before but it really isn’t that difficult, particularly if you use a lawyer or a service to do it for you.