One of the most common questions that our Community Futures Lesser Slave Lake Region's Business Analyst is asked is "Do I need to Incorporate My Business?" and "Why Should I Incorporate My Business?" If you're asking yourself the same questions about your business, be sure to keep reading!
Reasons to Incorporate Your Business
Here are six reasons as to why it is beneficial to consider incorporating your business:
The business becomes its own legal entity, separate and apart from its owner(s) allowing the corporation to :
Buy, sell, and own its own assets, including land
Make contracts
Sue or be sued
Incorporating provides liability protection for your personal assets. Any potential legal challenges your company faces, your risk of personal loss is limited to the amount you have invested in the company
Corporate and personal taxes are separate. Corporations and individuals pay different tax rates. Incorporating separates the tax you pay on your personal and business income. This is beneficial when the corporate tax rate is lower than your personal tax rate.
Potential for income splitting opportunities. If you pay dividends to shareholders and family members are shareholders; it gives you the opportunity to redistribute income to family members in lower tax brackets.
Incorporating can help with succession planning. In sole proprietorships and partnerships, the business ends with the death of the owner(s). A corporation continues to exist even if the owner dies or the business is sold if succession planning occurs.
Corporations have more access to capital, either through borrowing money at lower rates than individuals or by selling bonds or shares
How To Incorporate an Alberta Business
We know that it can seem overwhelming to Incorporate your business in Alberta. We've created this step-by-step process outlining how to incorporate your business here in Alberta.
Choose a Name: Your business name must include 3 elements: distinctive, descriptive, and legal. For example, Lesser Slave Lake Construction Ltd.
Distinctive – unique word or location – “Lesser Slave Lake”
Descriptive – description of what corporation does – “Construction”
Legal – all corporations have a legal element at the end of their name. “Ltd.” in the above example. Possible legal elements include:
Limited
Ltd.
Corporation
Inc.
Incorporate.
Alternatively, your corporation can use a numbered company – for example, 1234567 Alberta Ltd., where the number is assigned by Alberta Corporate Registry and “Alberta” is the second part of the name
Conduct a NUANS Report:
To incorporate a business under a word name, you have to propose a name that meets the requirements in step 1 and receive pre-approval of a corporate name. To do this, you must conduct a NUANS name search report, to determine if the proposed name is similar to an existing business name or trademark already registered.
The request will be reviewed and approved by Corporations Canada before you can use the name in your incorporation. The pre-approval is valid and the name is reserved for 90 days from the date of the NUANS name search report
No NUANS Report is required for a numbered company
Collect Information: Collect the needed information for your articles of incorporation
Name of corporation
Classes of shares, the maximum number of shares that the corporation is authorized to issue, restrictions on share transfers
Number, or maximum and minimum number, of corporation directions
Any restrictions regarding what type of business the corporation can or cannot engage in
Authorized signing authority, with details about the person’s relationship to the corporation, email address, and signature
Record Corporation’s Address:
The registered office must be a physical location in Alberta
The records address may not be the same as the registered office, and if different, the physical address needs to be included
If the mailing address is different than the registered office’s physical location, record the mailing address (i.e. post office box).
Appoint Corporate Director(s)
List the person(s) appointed as director(s) of the corporation, including the name, appointment date, and physical or mailing address
Appoint An Agent: for service, which is an individual located in Alberta who can accept notices and documents in person or by mail on behalf of the corporation. The agent for service may or may not be a lawyer.
Include the appointment date, agent’s name, and full address
Submission: Submit your incorporation forms to a registry agent, including
NUANS report
Articles of Incorporation
Notice of Address
Notice of Directors
Notice of Agent for Service
Valid government-issued identification
Fee
If the information meets all the requirements, the information will be submitted to Alberta Corporate Registry and you will be provided with a certificate of incorporation immediately
Note that the only registry agent in our region that can process incorporations is Slave Lake Registries. For further information, please go to www.SlaveLakeRegistries.com or phone 780 849-3939
How To Incorporate As A Canadian Business
We know that it can seem overwhelming to Incorporate your business in Canada. We've created this step-by-step process outlining how to incorporate your business here in Canada. It follows the same step-by-step guide mentioned above with a few key changes:
This is a similar process to incorporating in Alberta but offers the ability to operate under one unique name across Canada. Fees are similar, but federal incorporation can be completed online or by email
Express service is available, which allows incorporation to be completed and articles of incorporation to be received within one business day.
For further information, please go to:
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