In Alberta, there are three different corporation types. Limited Corporations, Unlimited Liability Corporations and Professional Corporations. The most common type is the Limited Corporation. Unlimited Liability Corporations and Professional Corporations are used in special circumstances.
Most people will be looking to incorporate a Limited Corporation given the limited liability protection it offers to shareholders. It the most common form of corporation used by those looking to incorporate a new company. There are, however, circumstances where other types of corporations may be desired.
A Professional Corporation is a type of corporation that provides professional services that are regulated by a governing professional body. Examples of professionals who use Professional Corporations include Chartered Professional Accountants, Chiropractors, Dentists, Lawyers, Physicians and Optometrists. If the business to be carried on by your corporation falls into one of these professions, you will be looking to incorporate a Professional Corporation. It is important to note that Professional Corporations do not shield shareholders from liability to the same extent that Limited Corporations do.
An Unlimited Liability Corporation is a special purpose entity which can offer certain tax advantages to a US shareholder when used properly in conjunction with sound tax advice. Unlike Limited Corporations, the liability of each of the shareholders of an Unlimited Liability Corporation for any liability, act or default is unlimited in extent and joint and several in nature. Given the complexities involved (and to the extent you have not already done so) we would strongly recommend that you seek advice from tax advisers to determine if an Unlimited Liability Corporation is right for you.
Finally, if you intend to incorporate a Professional Corporation or an Unlimited Liability Corporation, you will not be able to incorporate in the federal jurisdiction as these special purpose entities are only available at the provincial level.
