Incorporating a business is an exciting step toward establishing your small business in Calgary, Alberta. Whether you’re a solo entrepreneur or building a team, incorporation can provide numerous benefits like liability protection, tax advantages, and greater credibility. However, understanding the costs involved is crucial for proper planning. This guide breaks down the essential fees and expenses you can expect when incorporating your business in Alberta.
Why Incorporate Your Business?
Before we dive into the costs, let’s quickly touch on the reasons why many entrepreneurs in Calgary choose to incorporate. When you incorporate, your business becomes a separate legal entity. This offers:
- Limited liability protection: Your personal assets are protected if your company faces legal issues.
- Tax benefits: Incorporated businesses may qualify for lower corporate tax rates and more flexibility in claiming expenses.
- Enhanced credibility: Clients and partners may view your business as more professional and trustworthy.
While incorporation offers these advantages, it’s important to understand the associated costs so you can budget effectively.
Initial Costs of Incorporating in Alberta
In Alberta, the process of incorporation includes both government fees and potential professional services, like hiring a lawyer or an accountant. Below is a breakdown of the key costs involved:
1. Government Incorporation Fees
- Name Search and NUANS Report: To ensure your chosen business name is unique, you’ll need a NUANS (Newly Upgraded Automated Name Search) report. This costs approximately $45–60.
- Alberta Incorporation Fee: The provincial government charges a one-time fee of $275 for incorporating in Alberta. If you choose to incorporate federally (which allows you to operate across Canada), additional fees will apply.
2. Professional Fees (Optional)
- Lawyer or Accountant Fees: While it’s possible to incorporate on your own, many entrepreneurs hire legal or accounting professionals to ensure everything is done correctly. Hiring a lawyer to prepare and file your incorporation documents could cost between $500 and $1,500, depending on the complexity of your business. Accountants may charge a similar amount to advise on the financial structure of your corporation.
- Online Incorporation Services: Alternatively, you can use an online incorporation service, which typically costs $300 to $600, including the filing fee. These services simplify the process but may offer limited customization.
3. Extra Costs for Federal Incorporation
- Federal Incorporation Filing Fee: If you choose federal incorporation, the government fee is $200 for filing online and $250 for paper filing.
- Annual Return Filing Fees: Corporations, whether provincial or federal, must file annual returns to keep their business status active. For Alberta, the annual filing fee is $75. Federally incorporated businesses will need to file federal returns at an additional cost of $20 per year.
Ongoing Costs After Incorporation
Incorporation is not a one-time expense. Once your business is incorporated, there are ongoing costs you’ll need to account for:
1. Annual Returns
- As mentioned, you’ll need to file an annual return to confirm your company’s status with the provincial or federal government. This costs $75 per year in Alberta.
2. Corporate Taxes and Accountant Fees
- Even though incorporation may reduce your taxes, you’ll likely need an accountant to handle your corporate tax filings. Accountant fees for small businesses in Calgary usually range from $1,000 to $3,000 annually, depending on the complexity of your financials.
3. Registered Office Address
- You must provide a registered office address for your corporation. Many small business owners use their home address, but others may prefer a professional office or mailbox service, which can cost between $20 to $100 per month.
Total Estimated Costs of Incorporating in Alberta
To summarize the total costs of incorporating a small business in Calgary, here’s an example breakdown for a typical entrepreneur:
| Expense | Cost Range |
| Name Search & NUANS Report | $45 – $60 |
| Alberta Incorporation Filing Fee | $275 |
| Lawyer or Accountant (Optional) | $500 – $1,500 |
| Online Incorporation Service (Optional) | $300 – $600 |
| Annual Return (Alberta) | $75/year |
| Registered Office (Optional) | $20 – $100/month |
| Corporate Tax Filing (Annual) | $1,000 – $3,000 |
Based on these factors, the initial cost to incorporate ranges from $320 to $1,835 if you go the DIY route or use an online service. However, if you choose to hire professional help, you may be looking at costs between $820 and $2,835 or more, depending on your needs.
Should You Incorporate Your Business in Calgary?
For many small business owners, the benefits of incorporation outweigh the costs, especially in a growing city like Calgary where business opportunities are expanding. Incorporation protects your personal assets, gives you access to tax advantages, and enhances your credibility with clients.
That said, it’s important to weigh the initial and ongoing costs to ensure it aligns with your business goals. If you’re uncertain, consulting with a business advisor or accountant can help you make an informed decision.
Key Takeaways
Incorporating a business in Alberta involves various costs, from filing fees to professional services. While the initial investment may seem high, the long-term benefits, including liability protection and tax savings, can make it worthwhile. To get started, budget for both initial costs and ongoing obligations like annual filings and accounting services. Reach out to us if you need expert guidance on incorporating your business!
