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How Can I Set Up My Business In Alberta?

There are a number of legal concepts that you should think about when setting up your business in Alberta.

Sole Proprietor

This when you as an individual own and run your business. The advantage of using this method is that your expenses are deductible against your personal income. The big disadvantage is that you and your personal assets such as your house or savings could be exposed if there is a lawsuit.


Under the Alberta Partnership Act, a partnership is “the relationship that exists between persons carrying on a business in common with a view to a profit”. There are different types of partnerships in Alberta- an ordinary partnership, a limited partnership and a limited liability partnership, although it is beyond the scope of this article to describe these in depth. Partnerships can be between individuals and between corporations. In an ordinary partnership between individuals, partners are liable for debts and obligations of the firm incurred while they were partners- this means that your personal assets can be exposed in the case of debts or other obligations, which again is a big disadvantage.


A corporation is considered a separate individual from you under law. A corporate structure can be an effective structure to shield your personal assets from liability, although many organizations including lenders insist upon obtaining personal guarantees. You cannot deduct corporate expenses against personal income.

If you are going to structure using either a Partnership or Corporation, you need to ensure that you have a proper Partnership Agreement in place, or in the case of Corporations, a Unanimous Shareholders Agreement.

You should be aware that there are methods you can use when not currently in default under your obligations to protect your assets from potential creditors- this is called creditor proofing. Tools such as trusts and transfers of property, when done correctly at the right time can sometimes shield your assets.

If you are setting up a business in Alberta and need advice as to how to structure it or wish to discuss the above any further, please contact us:

The information contained in this article is not legal advice. No solicitor client relationship is formed through this article. The reader is encouraged to retain counsel for advice in these matters.

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