If you have decided to take the next step and decide to incorporate your business, the following are some suggestions as to how to begin this process. After reading the below, we can show you how to appropriately structure your company in terms of who should own shares and the tax advantages to doing so.  Please note that overall fees relating to incorporation can be as low as $100 up to an average of $2,000, depending on the complexity of the setup. Before visiting a registry office, a minute book should be setup for your company, which will contain all of your relevant incorporation data. For assistance in creating a minute book there are many self-incorporation kits on the web for your use. Alternatively, a corporate lawyer could also assist you in this process.

1.  Corporate Names

There are different types of names. You can have a “named” name, such as ABC Holdings Ltd., or a “numbered” name, such as 1234567 Alberta Ltd.

“Named” Names

A “named” name should consist of three parts, or elements. The first part is usually the distinctive element. In the example, “ABC Building Supplies 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, “Building Supplies” 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
  • ULC
  • Unlimited Liability Corporation
  • Professional Corporation

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”.

“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.

 

2. Conducting a NUANS Report to Name Your Corporation

A NUANS Report (Alberta Name  Reservation 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.

 

3. Corporation Structure

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

 

4. Where do I go to incorporate?

Once you have gathered all of your information and required documentation, you must take it to an authorized service provider. You must tell the authorized 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.

The authorized service provider will examine your information, and if it meets the current legislated requirements, the provider will process the request and issue you a certificate of incorporation as proof that the registration has occurred.

 

5. Permits and Other Formalities

You may have to fulfill a number of other requirements in order to carry on business. For example, some municipalities ask you to obtain a permit to carry on business in the municipality. You may also need a provincial permit to carry on business in a particular sector; for example if you operate a restaurant, you may need a liquor permit to serve alcoholic beverages.

We suggest you check with the appropriate municipal, provincial, territorial or federal government agencies, as well as professional organizations.

 

6. Business Number

The Business Number (BN) is part of a unique federal government numbering system that identifies your business and the accounts you maintain with the Canada Revenue Agency (CRA). Generally, CRA uses a BN for the following business accounts:

  • Goods and Services Tax/Harmonized Sales Tax (GST/ HST);
  • payroll deductions;
  • corporate income tax; and
  • import/export duties and taxes.

When you incorporate your business, you should ask CRA to issue a BN for your corporation by filling their specified forms. CRA will then register your corporation and send you a letter confirming your BN and the accounts registered, as well as a summary of the information you provided.

You will find more information about the BN on the CRA website.

 

 

To find out more information about incorporation and you and your company’s obligations as well as sample minute book documentation you can visit the following online resource provided by Industry Canada

Guide to Federal Incorporation

http://www.ic.gc.ca/eic/site/cd-dgc.nsf/eng/h_cs04839.html

 

If you would like more information on the above we would gladly be able to assist you with your needs.