Written by Joshua J. Marych (Associate) and Mitchell Grimmer (Articling Student)

Parlee McLaws LLP has been providing business law advice for over 50 years. Below is a list of the most common business structures utilized in Alberta. If you or your business is interested in determining which business structure is best suited for you, do not hesitate to contact one of the lawyers in our business law practice group.

Forms of Business Enterprise:

Three basic business structures include: Corporations, Sole Proprietorships, and Partnerships.


In Alberta, corporations are separate legal entities, distinct from their shareholders. Shareholders of a corporation have limited liability and only under rare circumstances can shareholders be held personally responsible for the corporation’s liabilities. The benefits of incorporation include limited liability and tax advantages. This business structure is the most common in Alberta.

Sole Proprietorships

A sole proprietorship is typically when a business is owned and operated by one individual. This structure is relatively straight forward and is best suited for smaller businesses.

One of the negative attributes of this structure is the owner is personally liable – without limit – for all obligations and liabilities incurred by the business. In addition, with this kind of business structure the owner is taxed at their personal rate, which could be very high if the enterprise is successful. However, as opposed to a corporation there are less fees and paperwork associated with sole proprietorships.


Three essential elements of a Partnership in Alberta under the Partnership Act include:

  1. The type of business may include any trade, occupation or profession;
  2. The enterprise must be carried on by persons in common, requiring two or more persons with the legal capacity to be partners (including two or more corporations); and
  3. The enterprise must be carried on with a view to profit.

General Partnership: In general partnerships, each partner faces unlimited liability for the obligations of the partnership. This liability can be lessened by partnership interests being held through a corporation.

Limited Partnership: There are two types of partners in this structure, general partners and limited partners. They are required to contribute capital or property and are typically used for tax purposes. General partners will manage the innerworkings of the partnership and will attract unlimited liability. Conversely, limited partners do not participate in the management of the partnership and their liability is limited to the capital they contribute to the partnership.


If you have any questions with respect to this newsletter, please contact Bianca Kratt, K.C.

Disclaimer: This is not intended to act as legal advice and is for information purposes only.