Steps to Starting a Business in Alberta.

• Author: Zeeshan, Khadija
• Position: Feature: Low for Entrepreneurs

The information below is not legal advice and different steps or requirements may be necessary according to your specific situation. It is highly recommended that you speak with a lawyer if you are thinking about or are starting a business.

STEP 1: CHOOSE A FORM OF BUSINESS

The first step when starting a business is to choose a form of business. Each form of business has different succession rules, as well as specific tax and liability consequences. Speak to a lawyer about what form of business would be best for you. The three main forms of business are:

(a) Sole Proprietorship: A sole proprietorship is a form of business where there is a single owner. The sole owner is fully responsible for the debts, contractual obligations and liabilities. For example, creditors can claim the business owner's personal assets. Profits are taxed as personal income, not business income. It is best to consult a tax lawyer or accountant for all possible tax implications.

(b) Partnership: This form of business is governed by Alberta's Partnership Act, common law and the partnership agreement. A partnership is defined in the Alberta Partnership Act as "a relationship that subsists between persons carrying on a business in common with a view to profit". It can be created by an agreement, oral or written, or even by the conduct of the parties. The Partnership Act has default profit sharing and management schemes, but partners can agree to other arrangements. However, partners are unable to contract out of liabilities owed to third parties. There are different types of partnerships, including:

* General Partnership: All partners manage the business and can be held personally liable for their own and their partners debts, contractual obligations, and liabilities.

* Limited Partnership: There must be one or more general partners, and one or more limited partners. General partners manage the business and accept unlimited liability. Limited partners only contribute capital and are liable for debts up to the amount they have agreed to contribute.

* Limited Liability Partnership: This form is limited to professionals, such as doctors, accountants and lawyers. The partners are responsible for their own debts and obligations, and any negligence or wrongful acts committed. All are responsible for the ordinary debts of the partnership.

(c) Corporation: A corporation is a separate legal entity from its shareholders and is considered a person under the law. The shareholders...