Setting up and running your own business has taken a large amount of work. Lots of time, effort, and resources have been allocated to get your business off the ground. Now that there is a workflow, and clients are coming in or products are being sold, it may be time to consider incorporating your business. This process may save you yearly tax owing, personal liability and allow you to grow your business.
In Alberta, incorporation under the Business Corporations Act [“BCA”] is performed electronically via the Corporate Registries System. The following documents must be presented for registration:
• Articles of Incorporation – These include key information such as the corporation’s name, classes and any maximum number of shares of the corporation, the detail on each corporate director and any restrictions on the corporate business;
• Notice of address– Corporation must ensure to have a registered office in the province of Alberta and ensure that its registered office and records office is accessible during business hours;
• Notice of directors– Every time directors undergo a change this document has to be created and it must be filed within 15 days of the change; and
• NUANS search results – An Alberta corporation name consists of three elements – distinctive, descriptive and legal. Once a corporate name is selected, it is important to retrieve an Alberta NUANS report in order to ensure that there is no other corporation with an identical name or a name that is too similar to your proposed corporation name. Unlike business names, identically named corporations are not allowed.
There are three types of corporations that may be formed:
• Corporations with 15 or fewer shareholders – these are the most common corporations in Alberta and have the least amount of regulations
• Corporations with 16 or more shareholders which do not let the general public have any shares – these corporations must prepare shareholders’ lists for business meetings and have more compliance requirements under the BCA.
• Corporations with 16 or more shareholders and issuing shares – this type of corporation is subject to the most regulation and has strict compliance procedures with the Alberta Securities Commission.
After the corporation is set up, the firm’s corporate records are managed through the Minute Book, which includes the Certificate of Incorporation, Articles of Incorporation, Bylaws, Notice of Directors, Notice of address, Directors’ minutes, Shareholders’ minutes, Shareholders’ register, Register of directors and officers, and securities register.
Further, different types of agreements need to be considered once the corporation is up and running, which include:
• Shareholder Agreements – Typically these agreements are known as Unanimous Shareholder Agreements [the “USA”], meaning that all current and future shareholders are parties to the agreement. The Corporate USA helps current shareholders plan for the future and help to resolve ongoing disputes. The agreement deals with the operation of the corporation, and the responsibilities, and rights, including, voting rights, of the shareholders. The ultimate goal is a proactive effort by the shareholders to plan for and mitigate future business disputes and issues that may arise.
• Confidentiality Non-Disclosure Agreements – These agreements deal first and foremost to protect your corporate information. As your business expands and grows, employees, contractors and other third parties will have access to the company’s sensitive and proprietary information, such as process schemes and customer lists. These agreements place restrictions on transmission and disclosure of this information, requirements for handling such information, and penalties for confidentiality breaches.
These initial steps may seem fairly basic and straightforward, but they will ensure that your business is set up for long-term success.
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