Know What Type of Corporation You Need
Many people have not given much thought to the type of corporations that are available to them. While many people may have heard about numbered companies and also know that some companies have names, they may not know the other types of corporations that are available to them. In some situations, you may not have a choice as to which specific type of corporation you can use but our experienced team can assist you in ensuring you incorporate the right type of corporation.
While many people think that the incorporation process is difficult, it is not with the right help. Incorporating offers many advantages and benefits. It is important to note that the benefits of incorporation may be lost if the corporation is not set up and maintained correctly. This is not an expensive process, but it is important. You risk losing these benefits if you fail to properly set up your company. The different types of corporations and other legal entities similar to corporations include a number of choices. For example:
• Named Corporations
Named corporations frequently make up the corporations used for business purposes. When incorporating a named corporation, you decide on the name of the corporation (so long as the name is not already in use) and named corporations offer all the advantages of numbered companies.
• Numbered Corporations
Numbered corporations are very similar to named corporations with one obvious exception: the name of a numbered corporation is simply a number assigned by the government’s Corporate Registry followed by the name of the province and “Ltd.”, “Inc.” or “Corp”. Numbered corporations are less expensive as no name search requirement exists prior to registration of the numbered company.
• Professional Corporations
A professional corporation is a specific type of corporation which is used by professionals who are members of specific professions, including doctors, accountants, dentists, engineers and lawyers. While professional corporations allow for the tax advantages of incorporating, they often do not provide liability protection.
• Trade Names vs. Corporations
Trade names do not make up a type of corporation at all. They, in fact, lack any legal similarity or benefit of a corporation. A trade name is a business name that people register with Corporate Registry.
• Condominium Corporations
Condominium corporations are one of the types of corporations which are not incorporated under Alberta’s Business Corporations Act, for example, but are instead created pursuant to Alberta’s Condominium Property Act. A condominium corporation gets created legally upon registration of a condominium plan at the Alberta Land Titles Office. In other words, it consists of all owners of units within the condominium plan.
Societies are legal entities which are registered as organisations pursuant to the Societies Act of Alberta and are often used for non-profit purposes. Once properly established, societies may, in certain circumstances, obtain charitable status with the Canada Revenue Agency. Alternatively, societies, as a legal entity, frequently help maintain a legal standing for a group that is not in the business of making a profit but to not meet the requirements of a charity.
• Not-for-Profit Organisations
Non-profit organisations may obtain charitable status from the Canada Revenue Agency. One of the advantages of a charitable organisation is its ability to issue tax receipts to donors. A charity does not exist as a legal entity on its own. Therefore, it must meet certain requirements pursuant to the Income Tax Act to be registered as a charity.
Charities get their charitable status from the Canada Revenue Agency. The advantage to a charitable organisation is that it can issue tax receipts. A charity does not exist as a legal entity on its own. Many rules govern the use of charitable status. Each rule requires strict compliance in order for the organisation to maintain its charitable status.