There are more than 160,000 small businesses in Alberta today. And their number makes up 95.5% of all companies in the province. With this significant number, it’s not uncommon for small businesses to face challenges and run into legal problems sooner or later.
Unfortunately, sometimes, it’s already too late for lawyers to fix the damages when problems are encountered. And this situation is one reason business owners need small business lawyers in Alberta.
With the help of lawyers, you can protect your company, save your business from liabilities, and help it become successful. And more importantly, lawyers can help your organization by turning it into a corporation and acquiring advantages.
But what is a corporation, and how do small businesses become one?
What is a Corporation?
According to Investopedia, a corporation is a legal entity separate from its owners, shareholders, and employees. Corporations are sometimes called legal persons because they have the same rights and responsibilities as individuals.
And how do businesses become corporations?
Small business lawyers in Alberta can incorporate small businesses provincially under the Alberta Business Corporations Act. Once your application is approved, the company becomes its own person and gains several benefits.
What is the Alberta Business Corporations Act?
As a business owner, you must understand the basics of corporate law. And under this law are statutes, which are the ones responsible for creating corporations.
One of the main statutes in Alberta is the Alberta Business Corporations Act. It lays down the legislative requirements and processes for incorporating businesses in Alberta and the conditions necessary to maintain the corporation. These conditions include filing annual returns, changing shareholders, registering records, and more.
When your business passes the demands of incorporation, it can then pay taxes on its own, sue and be sued, loan or borrow money, buy and sell assets, and hire employees.
Reasons for Incorporating Your Small Business
There are several steps for your small business to become a corporation. And while it requires time, money, and effort to finish the process, doing so will give you significant advantages, especially concerning legal matters and taxes.
● Incorporating your business gives you limited liability. That means you are protected from personal liabilities. However, as a shareholder, you have responsibility for the corporation but only up to the amount of your investment. Thus, it will shield your assets from being taken away by creditors in case your business faces problems, such as bankruptcy and debts.
● Corporations live on even with the death of a shareholder. This benefit is great for planning the transfer of assets or ownership of the corporation to others.
● There are no corporate taxes to pay. In a corporation, the shareholders are the receivers of profits and losses, where you gain long-term financial benefits and lower taxes.
The timely process, costs, and documentation involved in incorporating businesses become worth it with all the benefits you gain. Thankfully, you can make the process more manageable with the help of small business lawyers in Alberta.
Of course, business lawyers will not simply assist you. Instead, they will first help you identify the pros and cons of incorporating your business. And from there, you will determine whether it’s more beneficial to turn your company into a corporation or not.
Therefore, your small business lawyers in Alberta must be adept and experienced so you get all the help you and your business need.