Alberta Named Corporations
In order to have a legal corporation in Alberta, you need to go through several specific steps. Corporations only exist because of legislation. In Albert it is the Business Corporations Act. This means that to have a valid named company or corporation, you need to follow all the specific laws as outlined in the Act. The named company lawyers at Kahane Law Office set up your named corporation and get your business off on the right foot. Connect right away to start off on the right foot.
What Is A Named Company In Alberta?
The name of an Alberta corporation usually consists of three parts, or elements: distinctive, descriptive, and legal.
Distinctive Element Of A Named Company
A ‘distinctive’ element is a unique word or location that makes the corporation name different from all others. This is essentially the name of the company.
Descriptive Element of A Named Corporation
A ‘descriptive’ element describes what the corporation does or what the corporation is. For example a company called Ed’s Plumbing Ltd., the word “plumbing” is the descriptive element. While there is a legal requirement for this element, over time, there have been several exemptions from this rule.
Legal Element Of All Alberta Corporation
The last part of a corporation name is the legal element. In our example, ‘Ltd.’ is the legal element. All Alberta corporations are all required to have a legal element at the end of the name. The Business Corporations Act (Alberta) provides for a variety of potential legal elements such as: Limited, Limitee, Ltee, Ltd., Corp., Corporation, Inc., Incorporated, or Incorporee. Please note that, under Alberta law, this element must be the last word in the name of each and every corporation in Alberta.
How Do You Incorporate A Named Company In Alberta?
To incorporate a “named company” in Alberta, you must first obtain a NUANS report and review it carefully to ensure that there are no other corporations whose names are identical to your proposed corporation’s name. This is different than a trademark search.
After your lawyer reviews the NUANS report with you, the next key step is to determine as to whether the proposed corporation name is too similar to other corporation names. If another corporation takes the position that your chosen name is confusingly similar to theirs, that corporation has the right to object to the Registrar of Corporations. A potential consequence is a forced change of your name if the Registrar agrees.
After you complete the name selection and search process there are several additional components to completing your corporation.
Articles Of Incorporation
First, you must draft Articles of Incorporation. The Articles of Incorporation set out the legal structure of your corporation, including the share classes and associated rights, and the restrictions (if any) that are placed on your business. The articles are a public record and require registeration with the Registrar of Corporations.
Second, you select both a “registered” and a “records” office address for your corporation. The registered office requires a physical location somewhere in Alberta. This requirement ensures a location for legally serving the corporation if necessary. The records address, when not the same as the registered office, also needs a physical location in Alberta. In addition, if you do not have mail delivery at the registered office you need to provide a mailing address in Alberta for your corporation.
Next, you designate the founding director(s) of your corporation. For corporations that are not reporting issuers, you are required to elect one director at a minimum. Directors must be adults and at least one quarter of the board must be resident in Canada. Director can be changed by a vote of the shareholders. Changes in the directors should be updated with the Registrar.
Lastly, you must create your minute book for your named company. The minute book must have the necessary directors resolutions, shareholders resolutions, corporate bylaws, share subscriptions, and share certificates to ensure that your corporation is formed properly and you are in good standing. Each year it is important to update and maintain the minute book of your named company. The cost of reviewing and updating a minute book, not properly maintained, often costs more than regular annual updates.
If You Fail To Incorporate
Lastly, failing to legally incorporate often leads to legal liability issues and the loss of tax savings, write offs or deferred taxes. In addition, under Alberta law, if you use one of the legal elements described above but not legally incorporated, you face a fine of up to $5,000. This includes corporations legally registered but then the Registrar strikes them, for failure to maintain their annual filings.
Contact us today to speak with one of our corporate and business lawyers. They help you to incorporate your named company and get you everything you need, legally, to ensure your business is a success.
Incorporating A Named Company In Calgary, Alberta
The corporate lawyers at Kahane Law Office in Calgary, Alberta can incorporate a named company for your business venture. If you are curious, learn more here about the differences between numbered and named companies. We can be reached toll-free at 1-877-225-8817 (or 403-225-8810 locally in Calgary, Alberta), or email us directly here.