Operating a Consulting Business In Alberta
Consultants are individuals, directly or through a company, who provide services to other people or businesses. Starting consulting businesses in Alberta is a common way for a service provider to save in taxes and protect themselves from liability. In some instances, Alberta companies are asking people who would normally act as an employee to incorporate and operate as a consulting business to them.
Starting Consulting Businesses: Is It Right For You?
If you have special and marketable skills, which have been honed through on the job training in industry, particularly in oil and gas, geology, information technology or engineering (of any form), and you have found yourself, for circumstances outside of your control, either unemployed, laid off, or under-employed, you can market your skills through a consulting business. Starting consulting businesses are a popular form of commercial enterprise in Alberta, and Canada. There are several considerations to be aware of when starting consulting businesses.
Choosing Your Legal Structure
As a consultant there are several ways that you can operate your business. People starting consulting businesses need to weigh the pros and cons about their various options. You can act as a sole proprietor wherein your contracts are personal contracts and the income that you earn is personal business income which is added to other sources of income that you receive in a given year. You can also operate as a partner in a partnership. A partnership is an income tax flow-through and the partners of the business share liability for the debts and obligations of the partnership. There is also the option of incorporating with a consultant lawyer. There are certain circumstances where any of these business structures might be preferable for you.
Incorporating As A Consultant in Alberta
Many individuals will incorporate their consulting businesses. By incorporating you can benefit from limited liability, perpetual existence, and deferred taxation (in certain circumstances). Starting consulting businesses with a corporate structure also allows you greater name protection than a sole proprietor, and also an effective mechanism to raise money from investors and create an employee infrastructure in your business. There are many pros and a few small cons to incorporating. The trained consultant lawyers at Kahane Law Office can help you understand what business form is correct and best for your business when starting consulting businesses.
Understanding and Drafting an Effective Consulting Agreement
Perhaps the most important factor in your consulting business (other than your skill set and your ability to market yourself) is the consulting agreement that you enter into for the provision of your services. There are several clauses that are often included in consulting agreements which consultant lawyers can assist you with. For example:
- An appointment scope clause setting out the term and scope of the services that will be provided to the client;
- A clause indicating the standard of service that you are able to provide (in accordance with required competency for the service undertaken);
- A clause directing the personnel who will be undertaking the work (in the event that you are contracting on behalf of a corporate consulting entity);
- Confidentiality, non-competition and non-solicitation provisions;
- Clauses detailing the mechanism that will be used for invoicing, compensation and billing and dealing with taxation responsibility and remittance;
- A clause dictating the nature of independence in the consulting arrangement and setting out the terms of autonomy, scheduling and supervision and where the services will be provided (and in what form);
- Indemnity clauses for third party claims;
- Assignment and notice provisions;
- Clauses that clarify how, and under want circumstances, the agreement may be terminated and the resulting entitlements and indemnities pursuant to a termination;
Consultant Lawyers In Calgary
The corporate and business lawyers at Kahane Law Office in Calgary, Alberta can help you to properly structure your consulting business and consulting agreement. There are many moving parts when starting consulting businesses. Make sure that you start consulting in a way that adequately protects you and guards against unnecessary risk. We are just a call away for help. Call today! 403-225-8810, or email us directly here.