Should You Incorporate Your Business in Alberta?
Understanding the Benefits, Considerations, and How CPA Bhatia Can Guide You Through the Process
For entrepreneurs and small business owners in Alberta, one of the most significant decisions you’ll face is whether to incorporate your business. Incorporation can offer a wide range of benefits, including tax advantages, legal protection, and greater credibility—but it’s not always the right move for every business. Understanding the pros and cons is critical to making an informed decision tailored to your goals.
At Bhatia Professional Corporation, we specialize in helping Canadian entrepreneurs—especially in Alberta—make strategic business decisions, including incorporation. Here’s a closer look at what incorporation means, when you should consider it, and how our expert team can support you throughout the process.
What Does It Mean to Incorporate a Business in Alberta? Incorporating your business means creating a separate legal entity under federal or provincial law. In Alberta, incorporation can be done provincially (Alberta Corporation) or federally (Canada Corporation). A corporation is distinct from its owners (shareholders), meaning it can own assets, enter contracts, and incur liabilities independently.– Anil Bhatia
Top Benefits of Incorporating in Alberta
Limited Liability Protection
One of the most compelling reasons to incorporate is to limit your personal liability. If your incorporated business is sued or owes debts, your personal assets (like your home or savings) are typically protected.
Tax Planning Opportunities
Alberta boasts one of Canada’s lowest general corporate tax rates. Incorporation allows you to benefit from:
- Small Business Deduction (SBD): The first $500,000 of active business income may be taxed at a significantly reduced rate.
- Income Splitting: Distribute income among family members via dividends (with some restrictions).
- Tax Deferral: Leave earnings in the corporation and defer paying personal income tax until funds are withdrawn.
Enhanced Credibility
An incorporated business often appears more legitimate to clients, investors, and lenders. It shows a level of professionalism and commitment that can improve trust and access to funding.
Easier Business Continuity and Succession
Incorporation makes it easier to transfer or sell your business. Corporations continue to exist regardless of ownership changes, offering long-term stability.
Access to Business Grants and Loans
Some government programs, grants, and financing options are only available to incorporated businesses.
Things to Consider Before Incorporating
While incorporation offers many advantages, it’s not the ideal choice for every business. Consider these points before taking the leap:
Added Costs and Paperwork
Incorporated businesses must file separate corporate tax returns, maintain annual minutes, and adhere to more rigorous record-keeping requirements. These add administrative complexity and cost.
Double Taxation Risk
If profits are distributed to shareholders as dividends, they may be taxed again personally—although Canada’s tax integration system helps offset this.
Salary or Dividends?
As a corporation owner, you must decide how to pay yourself. Choosing between salary and dividends affects your taxes, CPP contributions, and RRSP room.
This is where Bhatia Professional Corporation offers deep value. We assess your business income, personal tax situation, and long-term goals to design a customized compensation strategy.
When Should You Incorporate?
Here are some signs that incorporation may be the right move:
- Your business is growing rapidly or earning consistent profits.
- You want to reinvest earnings into the business.
- You plan to bring on partners, investors, or co-founders.
- You want to sell your business in the future.
- You’re taking on liability or large contracts.
- You’re concerned about personal asset protection.
If you’re still unsure, our team at Bhatia Professional Corporation can help you evaluate your situation with clarity and confidence.
How Bhatia Professional Corporation Helps with Incorporation in Alberta
Incorporation is more than just filing paperwork—it’s a strategic move that affects your taxes, legal structure, and long-term planning. Here’s how we support our clients across Alberta:
✅ Entity Selection Guidance
We help you decide whether a provincial or federal corporation is best based on your business model, growth plans, and customer base.
✅ Registration and Compliance
Our team manages the end-to-end incorporation process, including corporate name search, NUANS report, registration, and obtaining your Business Number (BN), GST/HST, and payroll accounts if needed.
✅ Tax Planning & Structure
We advise on share structure, holding companies, and tax-efficient compensation from day one. This reduces tax exposure and sets your business up for long-term savings.
✅ CRA & Corporate Filing
We handle your annual corporate tax filings (T2), GST/HST returns, and financial statement preparation to ensure full compliance.
✅ Ongoing Business Advisory
Post-incorporation, we stay with you—advising on growth strategies, expense management, CRA audit readiness, and succession planning.
Why Alberta is a Great Place to Incorporate
- Low Taxes: Alberta’s combined corporate tax rate (federal + provincial) is among the lowest in Canada.
- Business-Friendly Environment: Minimal red tape, strong entrepreneurial culture, and access to diverse industries.
- No Provincial Sales Tax (PST): Alberta doesn’t have PST, reducing complexity in sales and pricing strategies.
Ready to incorporate your Alberta business? Let Bhatia Professional Corporation guide you from startup to success.
📞 Book a free consultation today to get expert, local advice that’s built around your vision.