by Gleb Malinovsky, B.A., J.D.
Happy New Year! I want to start off this month to say thank you. Our little blog is brand new and we are still ironing out the kinks, but we are so grateful that you take time out of your busy day to spend with us.
We are kicking off 2020 with a two-part series about starting a business in Alberta. Part one will explain the different types of businesses in Alberta and part two will go into types of corporations and the pros and cons of incorporating your business.
Types of Businesses in Alberta
There are three types of businesses in Alberta:
Money and Taxes
In the eyes of the tax authorities, a sole proprietor or partnership and the company are the same. Therefore, all financial gains and losses are detailed in a schedule attached to the owner(s) personal income taxes. Profits are included in the owner(s) personal income and losses can be used to offset income.
A corporation, being a separate legal entity files income tax and financial statements separately from its shareholders. There are many tax benefits that go along with incorporating your business, but also many time consuming and costly responsibilities.
Regardless of whether you choose to start a business as a sole proprietorship/partnership or incorporate, there will be both legal and financial pros and cons. It is strongly advised that in addition to speaking with a lawyer, you also speak with an accountant.
Need more information? For more information about starting or maintaining a small business in Alberta, please check out these Alberta Small Business Resources.
In part two of our series, we’ll dive deeper into incorporation – the types of corporate entities and the benefits and disadvantages. In the meantime, please feel free to contact Shelley Germann at (403) 995-1410 to arrange a consultation to discuss your unique situation and options in more detail.
The contents of this post are for informational purposes only and are not to be considered legal advice. It is advisable that you speak with a lawyer prior to making any significant decisions.
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