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Corporations

AB

This publication guides practitioners through establishing, running, and dissolving a corporation in Alberta.

2 Matter Plans

Overview

The commentary covers topics like shareholders' voting rights, the appointment of directors, and the sales of company assets. It also provides specific guidance on drag-along and tag-along clauses, financing, and shareholder funding arrangements and provides an overview of insolvency.

The Reference materials folder includes guidance on electronic signing and remote witnessing, and the Getting the matter underway folder contains essential compliance and client engagement documents. The comprehensive Retainer Instructions ensure that all necessary information is gathered from the client at the outset of the matter.

The Business structures and the comparative table guide provides a comparison of the pros and cons of different business structures.

Precedents in this publication include:

  • Template letters for clients and shareholders;
  • Unanimous shareholder agreements – concise and extensive forms;
  • Agreements for share sales, transfers and options;
  • Library of minutes and resolutions;
  • Library of precedents for small businesses.
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2 Matter Plans Included

  • Item icon ALERTS - Nil
  • Item icon Full Commentary - Corporations (AB)
  • Folder icon Reference materials
    • Item icon AI Prompts
    • Item icon Electronic Signing and Remote Witnessing
    • Item icon Business Structures and the Comparative Table (AB)
    • Item icon Further information
  • Item icon Overview
    A corporation, or company, is a legal entity with its own rights and obligations, separate from its shareholders, directors, managers, employees, and agents. Provided the corporation remains registered, it will exist even if all its original shareholders or directors divest their interest or vacate ...

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  • Folder icon A. Getting the matter underway
    • Item icon File cover sheet - Corporations
    • Item icon To do list - General
    • Item icon First steps
    • Item icon Client details, verification, and source of funds
    • Item icon Retainer instructions - Corporations - Incorporation
    • Item icon Retainer instructions - Corporations - Disputes
    • Item icon Conflict of interest check
    • Item icon Initial letter to client enclosing retainer agreement - Incorporation
    • Item icon Retainer agreement - Alberta
    • Item icon Scope of work - Incorporation
    • Item icon Scope of work - Share sale
    • Item icon Time and costs estimates
    • Folder icon If required - Costs disclosure update and a non-engagement letter
      • Item icon Letter to client updating costs disclosure
      • Item icon Non-engagement letter
    • Folder icon General deeds, agreements, execution clauses, and statutory declarations
      • Item icon Deeds and Agreements
      • Folder icon Deeds
        • Item icon Confidentiality deed
        • Item icon Deed for general use
        • Item icon Deed of assignment of agreement
        • Item icon Deed of gift
        • Item icon Deed of guarantee
        • Item icon Deed of release
        • Item icon General deed of indemnity
        • Folder icon Library of standard clauses for deeds
          • Item icon Amendment clause
          • Item icon Confidentiality clause for defined information - All parties
          • Item icon Confidentiality clause for defined information - One party
          • Item icon Confidentiality clause for terms of agreement - All parties
          • Item icon Confidentiality clause for terms of agreement - One party
          • Item icon Costs clause
          • Item icon Counterparts clause
          • Item icon Dispute resolution clause
          • Item icon Events beyond control clause
          • Item icon Governing law and jurisdiction clause
          • Item icon Interpretation clause
          • Item icon No assignment clause
          • Item icon Notices clause
          • Item icon Severance clause
          • Item icon Waiver clause
          • Item icon Whole agreement clause
      • Folder icon Agreements
        • Item icon Agreement for general use
        • Item icon Heads of agreement
        • Item icon Non-disclosure agreement - Formal
        • Item icon Non-disclosure agreement - Informal
        • Folder icon Library of standard clauses for agreements
          • Item icon Amendment clause
          • Item icon Confidentiality clause for defined information - All parties
          • Item icon Confidentiality clause for defined information - One party
          • Item icon Confidentiality clause for terms of agreement - All parties
          • Item icon Confidentiality clause for terms of agreement - One party
          • Item icon Costs clause
          • Item icon Counterparts clause
          • Item icon Dispute resolution clause
          • Item icon Events beyond control clause
          • Item icon Governing law and jurisdiction clause
          • Item icon Interpretation clause
          • Item icon No assignment clause
          • Item icon Notices clause
          • Item icon Severance clause
          • Item icon Waiver clause
          • Item icon Whole agreement clause
      • Folder icon Execution clauses
        • Item icon Execution clauses - Agreements and contracts
        • Item icon Execution clauses - Deeds
      • Folder icon Statutory declaration
        • Item icon Statutory declaration
      • Item icon Standard annexure note for documents
  • Folder icon B. Establishing a corporation
    • Item icon Establishing a corporation
      Incorporation is completed under the Alberta Business Corporations Act 2000 or the Canada Business Corporations Act 1985. Alberta permits corporations incorporated in other provinces or under the Canada Business Corporations Act to do business in Alberta provided they meet the requirements under ...

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    • Item icon Federal incorporation
      Incorporation under the Canada Business Corporations Act 1985 can be completed online through the Online Filing Centre and a Nuans corporate name search is part of the federal incorporation process. The online filing portal gives incorporators the option of using the basic articles of ...

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    • Folder icon If required - Federal incorporation
      • Item icon Online Filing Centre – Government of Canada
    • Item icon Alberta incorporation
      Incorporation under the Alberta Business Corporations Act 2000 is similar to that under the Canada Business Corporations Act 1985. A Nuans name reservation and report for incorporating in Alberta is completed through a Nuans member, who can be found on the website: Search Nuans members by region. ...

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    • Item icon Corporate name
      The first step when incorporating is choosing a name. There is an additional cost for the Nuans name search, conflict check, and name reservation. If the incorporators do not wish to choose a name, the corporation can be assigned a number name.

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    • Item icon Nuans – Corporate name and trademark reports – Government of Canada
    • Item icon Notice of English or French Name Equivalency
    • Item icon Articles
      A corporation’s articles form an agreement between the corporation, shareholders, and officers on managing the corporation. They have the effect of a contract between the corporation and each director, officer, and shareholder. Each person agrees to act in accordance with the rules in the articles. ...

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    • Item icon Articles of Incorporation
    • Item icon Officers
      A corporation’s directors and other officers run its affairs. They are the directing mind of the corporation and, guided by the corporation’s documents, take steps to further the corporation’s objectives. The officers manage the corporation’s day-to-day business and report to the board of ...

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    • Item icon Notice of Directors or Notice of Change of Directors for Alberta Corporation
    • Item icon Shareholders
      All corporations must have at least one shareholder, also called a member. Each shareholder owns the corporation’s assets in the proportion their shares bear to the total shares on issue. Shares are personal property. Only persons or entities capable of owning property can be a shareholder.

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    • Item icon Share structure
      Part 5 of the Business Corporations Act 2000 deals with shares, including issuing, classes, rights, and redemption. Corporations can issue various classes of shares with different rights attached: s 26. It is entirely up to the incorporators and the shareholders to decide how to structure ...

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    • Item icon Unanimous shareholder agreement
      A unanimous shareholder agreement covers the relationship between shareholders and the corporation. They require the consent of all shareholders and are usually signed shortly after incorporation. These agreements are often adopted to protect the interests of smaller shareholders by limiting the ...

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    • Item icon Unanimous shareholder agreement - Concise
    • Item icon Unanimous shareholder agreement - Extensive
    • Item icon Subscription and securityholder agreement
    • Item icon Shareholder and unitholder agreement
    • Item icon Letter to client with draft unanimous shareholder agreement
    • Item icon Share certificate
    • Item icon Consent to becoming a shareholder
    • Item icon Consent to act as a director
    • Item icon Consent to act as a secretary
    • Item icon Register of shareholders
    • Item icon Letter to client to make appointment to sign documentation for incorporation
    • Item icon Notice of Address or Notice of Change of Address for Alberta Corporation
    • Item icon Notice of Agent for Service or Change of Agent for Service for an Alberta or Extra-Provincial Corporation
    • Item icon Find a Business Registry – Government of Alberta
    • Item icon Letter to client advising the incorporation is complete
    • Folder icon If required - Extra-Provincial Corporations
      • Item icon Statement of Extra-Provincial Registration
      • Item icon Notice of Agent for Service or Change of Agent for Service for an Alberta or Extra-Provincial Corporation
      • Item icon Notice of Extra-Provincial Corporation Adoption, Change or Cancellation of Assumed Name
  • Folder icon C. Running a corporation
    • Item icon Director guarantee
    • Item icon Corporation records
      Every corporation should maintain business, financial, and administrative records. The records should be kept at their records office in Alberta. They may be kept outside Alberta if they can be accessed by computer terminals or electronically at any time, and the corporation provides the necessary ...

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    • Item icon Shareholder meetings
      Annual and special meetings The articles or the unanimous shareholder agreement may provide for the place and time of shareholder meetings. In the absence of provisions, the directors may determine the place and time.

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    • Item icon Letter to shareholder enclosing notice of meeting
    • Item icon Notice of meeting and proxy voting form
    • Item icon Minutes of meetings
      Corporations must keep the minutes of the shareholders' meetings and resolutions at their records office, which can be their registered office or a separate location in Alberta. The minutes and resolutions may be kept outside Alberta, provided the records are accurate, reasonably updated, and ...

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    • Folder icon Library of minutes
      • Item icon Minutes of meeting
      • Item icon Minutes of meeting - Directors
      • Item icon Minutes of meeting - Transfer of shares
    • Item icon Resolutions
      Shareholders with voting shares control the corporation's activities, subject to any unanimous shareholder agreement. The articles, the applicable legislation, or any unanimous shareholder agreement, may provide that certain decisions are to be made by special resolution. Majority shareholders run ...

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    • Folder icon Library of resolutions
      • Item icon Corporate resolution
      • Item icon Corporate resolution - Appointment of auditors
      • Item icon Corporate resolution - Financial and solvency
      • Item icon Corporate resolution - Transfer of shares
      • Item icon Corporate resolution for vendor - Commercial real estate sale
    • Item icon Annual Return
    • Item icon Taxation
      The main reason to use a corporation to operate a business is favourable tax treatment compared to individuals. Corporations must file annual tax returns, even if dormant, with no trading activity for the year. Corporations are taxed at the federal and provincial level, with the aggregate tax rate ...

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    • Item icon Withdrawing funds from the corporation
      Shareholders are usually in business to make money and look for ways to take out their profit share. Money can be taken out of a corporation by:

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    • Item icon Changing corporation details
      The articles of the corporation may be amended in accordance with s 173. Corporations are obligated to keep the registrar informed of changes by filing the relevant form giving notice of the change under the Business Corporations Act 2000. Changes that warrant filing a notice include:

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    • Item icon Notice of Address or Notice of Change of Address for Alberta Corporation
    • Item icon Notice of Directors or Notice of Change of Directors for Alberta Corporation
    • Item icon Notice of Agent for Service or Change of Agent for Service for an Alberta or Extra-Provincial Corporation
    • Item icon Notice of Address Change for Agent or Alternate Agent for Service for Alberta and Extra-Provincial Corporation
    • Item icon Notice of Change of Address of Director(s)
    • Item icon Resignation and removal of directors
      A director ceases to hold office when they die, resign, are removed, or become disqualified: s 108 of the Business Corporations Act 2000. A Notice of Change of Directors must be filed with the registrar within 15 days of the change: s 113.

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    • Item icon Resignation as a director
    • Folder icon Library of precedents for small business
      • Item icon Agreement for supply of goods and services
      • Item icon Credit application
      • Item icon Dispatch and delivery policy
      • Item icon Director guarantee deed
      • Item icon Liability waiver and consent
      • Item icon Privacy policy
      • Item icon Returns and refund policy
      • Item icon Terms of trade
      • Item icon Website terms of use for advertising and booking personal services
      • Item icon Website terms of use for downloadable online products
      • Item icon Website terms of use for physical products
  • Folder icon D. Authority and execution
    • Item icon Authority to bind the corporation
      Corporations have a natural person's powers, rights, and privileges: s 16 of the Business Corporations Act 2000. The rights, powers, and privileges must be defined within the context of a non-living thing. For instance, a corporation is not entitled to the right to life, liberty, security of ...

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    • Item icon Document execution and electronic signatures
      A contract or document does not need to be in a specific form or signed in a specific manner solely because a corporation is a party to the contract. The form of a contract or document will be based on the general requirements of the applicable legislation. There are no signing formalities under ...

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    • Item icon Powers of attorney
      Corporations A corporation cannot grant a power of attorney under the Powers of Attorney Act, RSA 2000, c P-20. This Act only applies to individuals who have the capacity to grant powers of attorney, and not to corporations which are separate legal entities.

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  • Folder icon E. If required - Share sales, transfers and options
    • Item icon Issuing new shares
      A corporation may decide to issue shares for cash or non-cash consideration to raise funds or bring new people into the corporation. There is no limit to the number of shares a corporation can issue unless the corporation’s articles or unanimous shareholder agreement contains restrictions: ...

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    • Item icon Transferring existing shares
      Subject to any restrictions imposed by the articles and any unanimous shareholder agreement, shareholders may sell or gift their shares. Shares can be transferred by court order, such as in a family law settlement, or bequeathed by a shareholder’s will. There is no prescribed form for transferring ...

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    • Item icon Agreement for sale of shares - Concise
    • Item icon Agreement for sale of shares - Extensive - Corporation takeover
    • Item icon Transfer of shares
    • Item icon Deed of trust for purchase of shares by trustee
    • Item icon Share certificate
    • Folder icon If required - Options
      • Item icon Letter to vendor's lawyer exercising option
      • Item icon Letter to purchaser's lawyer exercising option
      • Item icon Put and call option agreement
      • Item icon Notice of exercise of option
      • Item icon Notice of appointment of nominee
  • Folder icon F. Disputes, bankruptcy, liquidation, and dissolution
    • Item icon Disputes
      Disputes arise within corporations and between corporations and other entities. They become involved in litigation to recover a debt, enforce a contract, or be sued over a business deal, or by their employees, or creditors. Corporations are involved when shareholders or directors sue each other ...

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    • Item icon Debts and contractual disputes
      A common issue in debt recovery and contractual disputes is whether the debt was validly incurred, or the contract was validly formed. These disputes are often based on whether the person acting on the corporation’s behalf had the authority to bind the corporation. This can be both a legal issue ...

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    • Item icon Before commencing proceedings
      The client’s position The rights and obligations of parties, including the corporation, its officers, and its shareholders, may be established or impacted by the corporation’s articles, bylaws, and unanimous shareholder agreement, and rights attached to shares. These documents help provide a ...

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    • Item icon Unpaid debts and bankruptcy
      Bankruptcy proceedings are brought under the Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3) or the Companies’ Creditors Arrangement Act (R.S.C., 1985, c. C-36). A demand to pay a debt due and owing can be a precursor to a bankruptcy application and winding up the corporation. The applicant ...

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    • Item icon Letter to client requesting relevant documents
    • Item icon Letter to director requesting corporation records
    • Item icon Letter to director requesting inspection of corporation minutes
    • Item icon Liquidation and dissolution
      A business corporation can be dissolved voluntarily or involuntarily under Part 17 of the Business Corporations Act 2000. Liquidation is an appropriate course of action when the corporation to be dissolved has extensive debts and liabilities but is otherwise solvent with assets that have not ...

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    • Item icon Articles of Dissolution
  • Folder icon G. Finalizing the matter
    • Item icon Finalizing the matter
      Original documents not delivered to the client should be placed in safe custody. Copies of the documents kept should be provided to the client and the corporation, so the directors and shareholders are aware of the location of all relevant documents. The client’s accountant may require copies of ...

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    • Item icon Letter to client finalizing the matter
    • Item icon Invoice recital - Incorporation
    • Item icon Invoice recital - Share sale
    • Item icon Closing the file
    • Item icon File closing checklist
  • Item icon Comments and suggestions for By Lawyers

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