When it comes to incorporating a company in Alberta, entrepreneurs are faced with an important decision: should they opt for a numbered company or a named company? Each option has its own advantages and considerations, and understanding the key differences between the two can help business owners make an informed choice that aligns with their goals.

What is a Numbered Company?

A numbered company is a type of legal entity that is identified by a unique number assigned by the Alberta Corporate Registry. Instead of choosing a specific name, numbered companies are designated using a numerical sequence. For example, a numbered company may be referred to as “1234567 Alberta Ltd.” This type of company is commonly chosen when anonymity is a priority or when a suitable business name hasn’t been chosen.

All numbered companies in Alberta must have “Alberta” as the second part of their legal name. This requirement helps differentiate the business names of Alberta-registered companies from those in other jurisdictions.

What is a Named Company?

A named company refers to a type of business entity that is registered and identified by a chosen name that reflects the nature, brand, or purpose of the business.

When incorporating a company in Alberta, entrepreneurs select a unique and distinctive name for their business. The chosen name has to contain three elements, a distinctive, descriptive, and legal element, in that order. For example, ‘ ABC Office Furniture Ltd.’ However, before finalizing the name, it is necessary to conduct a NUANS (Newly Upgraded Automated Name Search) report.

The NUANS report is a comprehensive search that compares the proposed name against existing business names, trademarks, and corporate databases to ensure its availability and uniqueness. Once the name is approved through the NUANS report, it can be registered with the Alberta Corporate Registry and allows the company to establish its distinct identity and brand in the market.

What Does It Mean to Incorporate?

Incorporating a company entails the creation of a corporation that acts as a separate legal entity that is distinct from its owners. By incorporating, individuals can enjoy several benefits and protections, such as raising money for the project, buying and selling assets, operating a business, setting up contracts, and having limited liability. A corporation is considered a separate legal entity, meaning it can sue and be sued, enter into agreements, and be held accountable for its actions.

In Alberta, naming or numbering a company is a legal requirement for incorporation. Governments use these names or numbers to maintain a register of businesses, track their activities, and ensure compliance with laws and regulations.

It also helps to identify and differentiate it from other businesses. It allows customers, suppliers, and stakeholders to easily distinguish one company from another, facilitating transactions and communications.

Difference Between Named and Numbered Company

While the structure is similar, there are several differences between a named and a numbered company:

Identification: Named companies have a unique chosen name, while numbered companies are identified by a numerical sequence assigned to the corporation name by the Alberta Corporate Registry.

Naming Flexibility: Named companies allow business owners to choose a specific name, while numbered companies do not require a chosen name.

Naming Conflicts: Named companies need to conduct a name search to avoid conflicts with existing businesses, while numbered companies do not, since each assigned number and trade name is unique.

Anonymity: Numbered companies provide a higher level of anonymity by not requiring a publicly recognizable name.

NUANS Report: Named companies typically require a NUANS (Newly Upgraded Automated Name Search) report to ensure their chosen name is not already in use. Numbered companies, however, do not need a NUANS report.

Types of Legal Corporate Name Endings

In Alberta, there are specific legal requirements regarding the endings of corporate names. The ending of the proposed company name must indicate its legal status and type of corporation. Common endings for named companies include “Limited,” “Ltd.,” “Incorporated,” “Inc.,” “Corporation,” and “Corp.” These endings inform stakeholders that the entity is a registered corporation and provide clarity regarding how the corporation acts and its legal status.

What Does Limited Mean?

The term “limited” in a company’s name indicates it is a limited liability company. This means that the liability of the company’s owners (shareholders) is limited to the amount they have invested in the company. In the event of debts or legal claims, the personal assets of shareholders are generally protected.

Where to Incorporate

When incorporating a company, entrepreneurs can choose to register provincially or federally, depending on their business objectives and scope.

Provincial Incorporation in Alberta: Registering provincially is suitable for businesses that plan to operate exclusively within Alberta. This option is simpler, less costly, and generally faster compared to federal registration. However, it requires additional steps if the business wishes to operate in other provinces or territories.

Federal Incorporations: Choosing federal incorporation provides a broader geographical reach for an independent legal entity and more protection for the company’s name. However, federal incorporation is typically more complex, time-consuming, and expensive than provincial registration.

How to Incorporate in Alberta

Incorporating a numbered company in Alberta involves several steps. Here is a general overview of the process:

Choose a Name: If you decide to incorporate a named company, one must select a unique and suitable name for the registered office of your business. However, if you opt for a numbered company, this step is skipped as the number will be assigned as the proposed corporation name by the Alberta Corporate Registry.

Articles of Incorporation: This document outlines key details of the company, documents its name, purpose, share structure, and restrictions on business or share transfers.

Notice of Address: Provide the company or law firm’s registered office address, which serves as the mailing address for business records, and the official mailing address for legal documents.

Notice of Directors: List the individuals or entities who will serve as company directors.

Notice of Agent for Service: Designate a law firm as an agent for service who will receive the legal documents on behalf of the company.

Submit Application: Submit the completed application forms, along with any required supporting documents, to the Alberta Corporate Registry office. If you are incorporating a named company, you also need a NUANS report, which demonstrates that your chosen name is not already in use. Note that the application must be filed by at least one incorporator who is competent, at least 18 years of age, and not bankrupt.

Cost of Setting Up a Numbered Company in Alberta

The fee to incorporate a company in Alberta is set by the Government. Additional costs may include a name approval fee, such as NUANS search fee for named companies, as well as legal fees for a business lawyer and agent service fees. It’s important to note that this cost is subject to change and is specific to Alberta. Check the current fee schedule before setting up a company.

Legal Maintenance

After filing the Articles of Incorporation, the incorporation process doesn’t end there. To stay compliant with legal requirements, you must undertake additional steps. These include maintaining corporate records and minute books, creating a shareholder agreement, and acquiring any required permits or licences, among other obligations.

Choosing between a numbered and a named company is an important decision. While a numbered company offers anonymity, cost savings, and flexibility, a named company allows for branding, recognition, and potential trademark protection.

Consider the unique needs and goals of your small business first, and consult with DLegal for guidance. Together we carefully weigh the advantages and considerations of each option so you can make an informed choice and establish a solid foundation for your business.