How to Incorporate Your Company

 

The topics in the Dial-A-Law series provide only general information on legal issues within the province of Alberta. This service is provided by Calgary Legal Guidance funded in part by the Alberta Law Foundation. The purpose is to make you aware of your legal rights and responsibilities. This is not legal advice. If you require legal advice, you should contact a lawyer.

This topic will discuss the process of incorporation in Alberta.  The procedure to incorporate your business is complex.  You are encouraged to consult a lawyer.

To begin, you must choose a name for your corporation.  You can use a numbered corporation or select a proper name.  If you choose to register under a numbered corporation, the number is assigned by the Corporate Registry.  For example, your corporate registry may be “99999 Alberta Ltd.”  Numbered companies allow for quick incorporation when there is no practical need to have a named corporation or for reasons of anonymity.  For example, a holding company to simply hold land or buildings does not require a name and can be simply a numbered company.

If you have a business where a name is better for people to easily identify its services, you should incorporate under an appropriate name.  For example, “ABC Plumbing Ltd.” is a name that people can easily identify.  The name cannot be the same name as an existing corporate name.  It cannot be confusing or objectionable.  The name must have a distinctive element, a descriptive element and a legal element.  For example, in “ABC Plumbing Ltd.”  ABC is the distinctive element, plumbing describes what the corporation does and Ltd. is the legal part.  You may also use a variation of “Limited”, “Corporation” or “Incorporated” or the abbreviation of these words.

You must obtain a NUANS Report for a named company.  Contact a private name search company to get advice on the name and to obtain a “search report” on it.  A list of private name search companies may be obtained from the Corporate Registry in Calgary or Edmonton or by consulting the Yellow Pages telephone directory under Searchers of Records. This search will tell you whether there is an existing company with the name you wish to use or one similar to it.  Alternatively you may want to check the Business Corporations Act and Regulations for rules on corporate names.

The NUANS Report must be registered as part of the documents for incorporation.  The NUANS Report must be filed within 90 days of the date the search was made.  If you are outside the 90 days when you actually incorporate, you will have to obtain another report.

Other documents are required for incorporation.  You must submit “Articles of Incorporation.”   This document provides the details of the business you are incorporating.  It outlines the corporate name, the share structure, restrictions on the transfer of shares, the number of directors, the names and addresses of the incorporators and restrictions on the corporation’s business.  Professional corporations created by a dentist, doctor, lawyer, accountant or optometrist must be approved by the association governing the profession.

Also, a “Notice of Address” must be filed showing the address of the registered office of the corporation and the records address if the records are kept in a place different from the registered office address.

The “Notice of Directors” must also be filed to show the names and addresses of the directors of the corporation and whether or not they are resident Canadians.

If all incorporation documents are in order:

  • NUANS Report (original report no more than 90 days old)
  • Articles of Incorporation
  • Notice of Address
  • Notice of Directors

and the fee is paid to the Corporate Registry; a Certificate of Incorporation is issued to confirm the existence of the corporation as a legal entity on the date of the Certificate.

The corporation should then be organized to begin the business.  The Directors and the shareholders each have responsibilities for the organization of the business.  For example, the Directors adopt the by-laws and the shareholders must confirm them at their next meeting. By-laws are the corporation’s internal management rules and regulations.  They set out such things as voting rights, procedures for director and shareholders’ meetings and document signing authority.  Also, the shares of the corporation must be issued, the officers appointed and the necessary documents approved for banking.  You should consult with a lawyer when drafting the bylaws and other organizational documents.  A corporate seal should also be adopted.  A seal is not required for most documents signed by an officer or agent of the corporation, but your bank may insist upon one.  Accountants and possibly auditors must be appointed.

Know your responsibilities to keep your company registered on the Corporate Registry’s active records. For example, you must file an Annual Return every year.  The Return must have the current information about your corporation and its shareholders.  If not returned on an annual basis, your corporation will be dissolved and it is expensive to revive your company again.  You are also required to advise the Registry of any changes in your address, or changes in the directors.