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Corporations
Incorporating an Alberta Corporation
The word 'limited' at the end of a Canadian corporation's name implies that
liability of the corporation's shareholders is limited to the money they paid to
buy the shares. By contrast, ownership by sole proprietor or partnership
carries unlimited personal legal responsibility for debts incurred by the
business.
To form a limited corporation, you must provide a corporate
name and address, describe the structure,
identify the 'type' of corporation and provide director
information. The following information is provided to assist you in
this process.
There are different types of names. You can have a "named" name,
such as ABC Holdings Ltd., or a "numbered" name, such as 123456
Alberta Ltd.
"Named" Names
Legal Elements
A "named" name should consist of three parts, or elements. The
first part is usually the distinctive element. In the example, "ABC
Holdings Ltd.", the distinctive element is "ABC". This part
should set your name apart from other names, making it easy to remember.
The second part describes what the corporation does or is. In our example,
"Holdings" is the descriptive element. The third part is the
legal element - our legal element in this case is "Ltd." There are
other legal elements, one of which must be in your corporation's name. Accepted
legal elements are::
- Limited
- Limitee
- Ltee
- Ltd.
- Corp.
- Corporation
- Inc.
- Incorporated
- Incorporee
Professional Corporations
Another type of "named" name corporation is a "Professional
Corporation" which is a corporation specifically formed for one of the
following types of professions:
- law
- medicine
- dentistry
- optometry
- chiropractic
- chartered accountant
- certified management accountant
- certified general accountant
This type of corporation will have the person's name, followed by the term
"professional corporation". An example of a professional
corporation's name would be "John Smith Professional Corporation".
Nuans Reports
A NUANS Report for a "named" name is required
to ensure that no one else has the identical name. If the report shows
similar names, you will have to decide if the name you want is too close to the
other names listed on the NUANS report. These other businesses may feel
very strongly about you using a name similar to theirs and they do have the
right to object to the Registrar of Corporations. The Registrar can force
you to change the name of your corporation, so pick your name carefully.
Alternately, the other company may have incurred debts or have an undesirable
reputation that you may not want your customers to associate to your company.
For further information, please refer to the Business Corporations Act and
Regulations for rules on Corporate Names.
The NUANS Report is submitted to an accredited service provider at the time
of incorporation and must be less than 91 days old and contain all 6 pages.
Either the original or the carbon copy is acceptable.
"Numbered" Names
A "numbered" name is also comprised of three parts - the numbered
part, which is assigned by Corporate Registry, the word "Alberta",
and your choice of one of the legal elements. A NUANS report is not
necessary for a numbered name.
To incorporate with a "numbered" name, you must specifically
request this type of name through the authorized service provider that you have
selected.
Once a name has been decided, the next step is to choose the structure of
your corporation. If you are unsure of what you want, it is a good idea to
do some research by visiting a library, looking in the business section of a
bookstore, or talking to a lawyer, who will be able to advise you.
You should understand and know what the following terms mean as each must be
addressed as part of the incorporation process:
- 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 the incorporator wishes to include
There are three types of corporations which may be formed:
- Corporations with 15 or less shareholders - these are the most common
corporations in Alberta and have the least amount of regulation.
- Corporations with 16 or more shareholders which do not let the general
public have any shares - these corporations must prepare shareholders' lists
for meetings and comply with various sections of the Business Corporations
Act.
- Corporations with 16 or more shareholders which do distribute shares to
the public - this type of corporation is subject to the most regulation.
It must file financial statements and other documentation with the Alberta
Securities Commission.
When you form your corporation, you must tell the accredited service provider
where the corporation is located (registered office) and where you want the
corporation's mail to go (mailing address) if this address is different.
You will also be required to submit the names, addresses, and Canadian residency
status of your directors.
Once you have gathered all of your information and required documentation,
you must take it to an authorized service provider.
The authorized service provider will examine your information, and if it meets
the current legislated requirements, will process the request and issue you a
certificate of incorporation as proof that the registration has occurred.
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