Corporation
A corporation is the most common form of business structure used in Canada. A corporation is a legal entity that is separate from its shareholders and management.
Corporations have rights, obligations, powers and privileges similar to individuals. Shareholders own the corporation, but they are not personally liable for debts, obligations or acts of the corporation.
Advantages and Disadvantages of Incorporation
Capital Structure
Canadian law is flexible with regards to setting up an appropriate capital structure for an enterprise.
Formation Procedure: Federal or Provincial Incorporation
A company may incorporate under either federal or provincial law. This choice can depend on a number of factors such as the type of business to be carried on in Canada, intended locations of operations, public disclosure requirements, residency requirements for directors, etc.
Federal Incorporation
A business can incorporate federally under the Canada Business Corporations Act (CBCA). Corporations Canada monitors compliance with the CBCA, and provides a Guide to Federal Incorporation which provides basic knowledge and tools for businesses.
Incorporating federally will allow the business to operate in any province within Canada, although registration in the province where the corporation intends to carry on a business is required.
Provincial Incorporation
A corporation can also incorporate provincially. In Alberta, companies can incorporate under the Business Corporations Act (BCA). Provincially incorporated companies can only carry on business in the province where they incorporated unless they obtain an extra-provincial license to operate in another province.
Federal and provincial incorporation policy
Alberta Government Services
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Includes details on how to incorporate a non-profit company, obligations and responsibilities, forms, legislation, and additional information.
- Business Corporations Act
- Business Corporations Regulation
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Incorporation vs. registration for carrying on business operations in Alberta.
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Incorporating an Alberta Corporation
Formation procedures, corporate names, structure, type, where to go to incorporate and additional information.
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Includes information on corporate registry, privacy information for business, tipsheets, and other useful links.
Industry Canada
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Guidelines on securing a corporate name.
- Fees
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Documentation relating to business corporations.
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Contains useful information on submitting an application to incorporate a business under the Canada Business Corporations Act.
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Legislation and Other Related Documents
Includes access to the Canada Business Corporations Act and other useful links.
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In Alberta, there are Industry Canada office locations in Edmonton and Calgary.
Management and Supervision
Generally, a corporation is made up of three groups:
- Directors - who appoint officers and supervise the management of the enterprise.
- Officers - who manage the day-to-day operations of the business.
- Shareholders - who elect the directors.
Across Canada under the CBCA, twenty-five percent of the directors in a corporation must be Canadian residents. If there are less than four directors, at least one must be Canadian.
In Alberta under the BCA, at least twenty-five percent of the directors must be resident Canadians.
Federal and provincial management and supervision requirements
Alberta Government Services
Industry Canada
Additional Resources
The Business Link
- Business Start-Up Guide for Alberta Small Businesses
- Business Start-Up Alberta Info Guide
- Incorporating an Alberta Corporation
- Provincial Business Licenses and Registration
New Business Now
Date Updated: Aug 21, 2008
RDP-1010