The terms “Corporation”, “Incorporated”, and “Limited Company” are synonymous.

An Incorporated Company -- the company is a legal entity separate from its owners (shareholders) and there is limited liability. Generally, no shareholders of the corporation can be held personally liable for the debts or actions of the corporation. Individuals may be required to sign personal guarantees for the corporate loans. In this case, individuals will assume personal liability. Companies can be incorporated either provincially or federally, depending upon the scope and nature of the business. A company incorporated in Alberta must register as an extra-provincial company if it wishes to do business in provinces other than Alberta.

1. Register Your Business Name at any Alberta Registries Office
2. Set Up a Business Bank Account
3. Get a GST Number (if applicable)
4. Obtain Proper Municipal, Provincial or Federal Licensing
5. Obtain Business Insurance

6. Register for WCB (if applicable)

This is the simplest way to set up a business. A sole proprietorship is fully responsible for all debts and obligations related to his or her business. A creditor with a claim against a sole proprietor would normally have a right against all of his or her assets, whether business or personal. This is known as unlimited liability.

This type of business comes under provincial jurisdiction. If the proprietor chooses to carry on a business under a name other than his/her own, he/she must register with the province. This function is now administered by the Private Registries. If a sole proprietor establishes a business in her/her own name, without adding any other words, registering the business is not necessary. Filing a Declaration of Trade Name to protect your business name is strongly recommended.

BUSINESS LICENSING

Each municipality in which you do business requires a Business License.  Cost varies from community to community.

HOME OCCUPATIONS

Applications for home occupation permits are available through your municipal office. Businesses are approved when it is determined there will be no significantly adverse impact on surrounding properties or on the residential character of the neighborhood. Usually, there is an application fee for home-based businesses. In addition, home occupations in most municipalities require business licenses. Contact your municipal office for more information.

Town of Okotoks:               (403) 938–4404 
Home Business:   $125.00
 

Only corporations and some types of partnerships must register with Canada Revenue Agency. When a new corporation is registered in Alberta, Corporate Registry will advise the taxation office, which will assign a taxation number for your business and send you a request for information. Note though, that a new corporation does not have to make any tax installment payments during its first year of a business.

Goods and Services Tax (GST)

Most businesses and organizations carrying on commercial activities in Canada must register and collect the goods and services tax (GST). Most businesses that have worldwide annual revenues from taxable supplies of goods of $30,000 or less do not have to register. However, any small business (Proprietorship, partnership, or corporation) may voluntarily register for GST.

Alberta Revenue – Corporate Taxation

Alberta Revenue’s Tax and Revenue Administration (TRA) division is advised of all new company registrations in Alberta. If you have chosen to form a corporation, they will assign an Alberta Corporate Account Number to your business and send you an information form to complete and return. The questions include your chosen business year end, mailing address, contact name, and phone number. They do not automatically send out tax return forms, but will mail them at your request. Forms may also be accessed on their web site (www.finance.gov.ab.ca). Alberta corporations are required to file a provincial tax return in addition to the federal return and they will contact you if a return has not been filed within six months of your business year end.

Provincial and Federal Corporate Taxation

All corporate residents in Canada are subject to income taxes levied upon income earned within the taxation year from all sources.

The owners of proprietorships and partnerships are required to record earnings as self-employed income on their personal income tax return. In addition, corporations located in Alberta are required to file both Federal T2 return and an Alberta AT1 return, separate from the owner’s personal tax return.