Alberta Corporations Inc A Guide to Different Types for Your Business

1. Alberta Corporations Inc: A Guide to Different Types for Your Business In this guide, we’ll walk you through the various types of Alberta corporations, so you can select the best one for your business needs.

2. What Is a Corporation in Alberta? A corporation is a legally recognized entity in Alberta, separate from its owners. This means it can enter contracts, own property, and be liable for taxes or legal disputes. One of the primary reasons businesses incorporate is to protect the personal assets of their owners and take advantage of tax savings. If you’ve been running a business under your own name or a trade name, incorporating may provide the legal separation you need to safeguard yourself.

3. Which Type of Incorporation is Right for You? Before you incorporate, it's important to understand the various types of corporations available. Many business owners are familiar with numbered companies and named corporations, but there are other legal structures to consider as well. Choosing the right one is crucial for your business's future. A corporate lawyer can help guide you through this process, ensuring your incorporation is done correctly to avoid any legal pitfalls down the road.

4. Types of Corporations in Alberta

5. Named Corporations • Numbered Corporations A named corporation is the most common form of business incorporation. When you register a named corporation, you get to choose the name (as long as it’s available). This option provides all the benefits of a numbered corporation but with the added advantage of a personalized business name. It’s a great choice if you want your business to stand out. Numbered corporations are similar to named corporations, but the name is assigned by the Alberta government’s Corporate Registry. It typically consists of a number followed by “Alberta” and a designation such as “Ltd.” or “Inc.” Numbered corporations are often more affordable to incorporate because there is no need for a name search prior to registration.

6. Professional Corporations • Condominium Corporations A condominium corporation operates under the Alberta Condominium Property Act, not the Business Corporations Act. These corporations are formed when a condominium plan is registered with the Alberta Land Titles Office. The “shareholders” are the owners of individual units within the complex. Condo owners should stay involved in the management of the corporation to protect their investment and maintain their property values. A professional corporation is a specialized corporate structure designed for licensed professionals such as doctors, lawyers, accountants, and engineers. Although these corporations offer tax advantages, they may not provide full liability protection, depending on the rules of the specific profession.

7. Societies • Cooperatives A cooperative is similar to a society but operates under different legislation. Cooperatives are formed when a group of individuals come together to manage an ongoing project or venture, such as a housing cooperative. They are useful in situations where a collective approach is needed. Societies are organizations that are registered under the Societies Act of Alberta. They are typically used for non-profit purposes, and in certain cases, they can apply for charitable status with the Canada Revenue Agency (CRA). Societies allow for legal recognition without the need to generate profit but don’t meet the requirements for charitable status.

8. Not-For-Profit Organizations • Charities Charities are not-for-profit organizations that have received charitable status from the Canada Revenue Agency. This status allows them to issue tax receipts to donors. Charities must comply with detailed regulations to maintain their status, and failure to do so could lead to penalties or the loss of this privilege. A not-for-profit organization focuses on a cause rather than generating profit. These entities may apply for charitable status through the CRA, allowing them to issue tax receipts for donations. This process, however, can be time-consuming and requires meeting strict criteria to maintain the organization’s legal standing.

9. It’s essential to understand that a trade name is not a corporation. While it might be registered with the Alberta Corporate Registry, it doesn’t offer the legal protections or tax benefits of incorporation. A trade name merely protects the business name and does not legally separate you from your business like a corporation does. • Understanding Trade Names vs. Corporations

10. Not-For-Profit Organizations Once your corporation is established, ongoing maintenance is essential to keep your company in good standing. This includes maintaining minute books, filing annual returns, and having a registered office. Failing to meet these requirements can result in the loss of incorporation benefits or even the dissolution of the company.

11. Conclusion Choosing the right type of corporation is a big decision that can affect your personal liability and the overall success of your business. Whether you’re looking for tax benefits, legal protections, or the flexibility to manage your business the way you see fit, there’s a corporation structure for you. Always consult a corporate lawyer to ensure you’re making the best choice for your business needs.