Incorporating in Alberta - Setting Up & Registering A Company
The first thing to consider is if you need to incorporate your business. There are 2 main considerations here, one being liability and the other being taxes. Incorporating can help minimize the liability of a business for the business owner. By incorporating you are setting up an entity separate from yourself and therefore moving most of the liability away from yourself. If you are in a business that could attract liability it may be worth incorporating regardless of the tax outcome. Taxes are a big consideration in knowing whether to incorporate or not. This comes down to how much profit the company will net and how much the owners (you and partners) will be taking out. Typically if a corporation will make $40,000 or more net profit it will be a tax benefit to incorporate.
Once you’ve decided you want to incorporate the next thing to consider is the structuring of the corporation. Sometimes structuring may include holding companies, trusts or other entities but that is something we would want to sit down and consult with you on to ensure you are taking the best route for you, the business and your family both now and in the future. The structuring of your articles of incorporation and the shares that will be issued can be very complex. We break it down in simple terms and help ensure we maximize the share structuring for control, income splitting and liability protection.
Another thing that is important when incorporating is having a completed Minute Book. Without this you have no proof of ownership such as share certificates and nothing showing you actually control this corporation. On top of this, not having a minute book could create issues with CRA or other legal issues down the road. Finally, not having a minute book will make it very hard to sell your business down the road as there is not a good record of everything. If you ever sell the corporation down the road you would want to sell the shares, not the assets. The sale of the shares means you may qualify for over $800,000 in Capital Gains Exemption per shareholder (pay no tax on this amount) when you sell!
Lastly, when you incorporate you also need to register a Business Number, which may include a GST number, Payroll number and/or an Import-Export number. This is something that you typically have to do on your own as no registry or lawyer is going to do this for you when you incorporate.
Let us take the hassle out of incorporating! KD’s incorporation packages include:
- Consultation on the articles, share structuring, Directorship and Officers
- Registration of Incorporation, Articles and Nuans (if applicable)
- Completed Minute Book
- Business Number Registration