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. In contrast, ownership by a sole proprietor or partnership carries unlimited personal legal responsibility for debts incurred by the business. In Alberta, limited corporations are governed by the Business Corporations Act.
If you need help choosing deciding whether to form a corporation or become a sole proprietor, contact one of the following organizations for help or advice.
- Business Link (offsite)
- Business Development Bank of Canada (offsite)
- Small Business Alberta (offsite)
How is an Alberta limited corporation formed?
Step 1: Choose a name.
- An Alberta corporation name consists of three parts, or elements: distinctive, descriptive, and legal
- Here is an example of an Alberta corporation name that contains all three elements: ABC Building Supplies Ltd.
- A 'distinctive' element is a unique word or location that makes your corporation name different from all others. In the example above, the distinctive element is 'ABC'.
- A 'descriptive' element describes what the corporation does or what the corporation is. In our example, 'Building Supplies' is the descriptive element.
- The last part of a corporation name is the legal element . In our example, 'Ltd.' is the legal element. All Alberta corporations are all required to have a legal element at the end of the name. The following are permitted by the Business Corporations Act.
- Unlimited Liability Corporation
- Professional Corporation - Note: This specialized legal element can only be used only for one of the following types of professions:
- Chartered Professional Accountant - effective July 1, 2015
- Your corporation can also use a 'number' name, e.g. 785843 Alberta Inc. The numeric portion of the name is assigned by Corporate Registry. 'Alberta' always forms the second part of the name. You may choose one of the standard legal elements above.
Step 2: Get a NUANS Report.
- Unless you have chosen to use a number name, you will need to purchase a NUANS report and review it carefully to ensure that there are no other corporations whose names are identical to your proposed corporation's name. Identically-named corporations are not allowed.
- Based on the NUANS report, you will also need to decide if your proposed corporation name is too similar to other corporation names. Remember, if another corporation feels you have chosen a name that is confusingly similar to theirs, that corporation has the right to object to the Registrar of Corporations. If the Registrar agrees with the objection, your corporation can be forced to change its name.
Step 3: Complete the forms or otherwise collect the information you will need for incorporation.
- Use the Articles of Incorporation to develop the legal structure of your corporation.
- If you are unsure of what you want or need, research corporate structure or get some advice from a lawyer.
- Select an address for your corporation.
- The registered office needs to be physical location in Alberta - so that the corporation can be legally served.
- The records address, when it is not the same as the registered office, also needs to be physically located in Alberta.
- You will also need a mailing address in Alberta for the corporation if you do not have mail delivery at the registered office.
- Elect or appoint at least one director for your corporation.
- Directors must be adults and at least one quarter of the board must be resident in Canada.
Step 4: Take your incorporation information, NUANS report, and fee to an authorized service provider.
- Your information will be examined for compliance to the Business Corporations Act. If it meets the requirements, it will be entered onto the Corporate Registry computer system by an accredited service provider and you will receive a certificate of incorporation.