Alberta Business Registration: Sole Proprietorship and Trade Name

Do I need to register a sole proprietorship in Alberta?

Only if you trade under a name other than your own. Alberta's Partnership Act, section 110 requires a person in business alone for trading, manufacturing, contracting or mining purposes to file a declaration when the business name is anything other than their own name, or their own name plus "and company" or similar words that suggest more than one owner. Two or more people in partnership for those purposes must register whatever name they use (section 106).

Alberta treats any name other than your own personal name as a trade name, so adding a description of the work counts. The registry states this without the Act's trading, manufacturing, contracting or mining limit; whether a service or professional business falls outside the Act is not settled, so registering is the safe course.

A case stops being simple when a second owner joins, when you are weighing incorporation for liability or tax reasons, when you have no social insurance number (SIN), when your sales are near the GST/HST small-supplier limit, or when you have already been trading without registering the name, charging GST/HST or reporting the income.

Gather before you file:

• Your legal name, home address and an email address (the registry requires an email for a business name)
• The trade name and, if you ordered one, a Business Name Report
• Valid government ID
• The date you first used, or will first use, the name
• Your SIN, or the business number the CRA already gave you
• A rough figure for your first year's sales, to judge GST/HST

How do I register a trade name in Alberta?

File a Declaration of Trade Name through an authorized Corporate Registry service provider: a registry agent that offers corporate registry services, or a law firm that offers registrations. Alberta's instructions give no route to file directly with the registry yourself. Its business name page sets out these steps:

1. Choose the name. It cannot end in "Limited", "Incorporated" or "Corporation", or their short forms, because those imply a corporation. Names do not have to be unique, but if yours is the same as or similar to an existing business name, corporation name or trademark, its owner could take you to court and you may have to change the name or pay damages.
2. Order a Business Name Report (optional). Alberta recommends this report from an authorized NUANS member but does not require it. It lists registered business, corporation and trademark names similar to yours.
3. Complete the Declaration of Trade Name. Alberta's sample form works, or your own document with the content the Act requires: your name and address, the business name, and a statement that no one is your partner (section 110(2)).
4. Take it to a service provider with your ID and payment. Not every registry agent offers corporate registry services, so check first.
5. Keep the proof of filing. Once the registry accepts the declaration, you receive proof of filing, and a business number by email unless you already have one.

A trade name registration is not a business licence; your municipality, or the province for some regulated businesses, may require one.

How much does it cost to register a sole proprietorship in Alberta?

The government fee for filing a trade name declaration is $10.61, plus the service provider's own charge. Alberta says these service fees are not regulated and vary from agent to agent, so the total depends mostly on where you file. The government fees are set in Alberta Regulation 10/2002 and listed in the Registry Agent Product Catalogue.

Alberta's registry sets annual returns for corporations and annual reports for limited liability partnerships, not for trade names. There is no yearly renewal fee for a trade name.

When must I register, and what if I am late?

File within 6 months after you first use the business name (section 110(2)(d)). A declaration filed later cannot be refused only because time has passed (section 110(3)), but the risks below apply while it is missing.

Late or missing filings carry risks the Act spells out:

• A fine. Failing to file a required declaration is an offence with a fine of up to $500 (section 112).
• A stalled lawsuit. If you sue a customer, for example over an unpaid invoice, the customer can ask the court to pause the case until you file (section 113).

Does registering a trade name protect my name or my personal assets?

No to both. Alberta states that a business name has no legal existence of its own: the sole proprietor is personally responsible for the business's debts and obligations, and the CRA notes the risk extends to your personal property and assets. Registration grants no ownership of the name; it is proof the name is in use, and someone else can register the same name.

Separating business debts from your own takes a corporation. See how to incorporate in Alberta and sole proprietorship or corporation.

Will I get a business number, and when do I need one?

Registering a trade name in Alberta brings a federal business number (BN) by email, unless the CRA already gave you one; then you keep using it (Alberta). The BN itself costs nothing.

If you trade under your own name, you need a BN only when you register for a CRA program account, such as GST/HST or payroll (CRA). The BN is an identifier, not a tax registration. A program account adds a two-letter code and a four-digit number to it, for example RT 0001 for GST/HST or RP 0001 for payroll if you hire employees (CRA).

The CRA sends people with no SIN, or a SIN starting with 0, to its non-resident registration route. If that is you, ask the service provider before filing how the BN will be issued.

Do I need to register for GST, and does Alberta have PST?

Register for GST/HST once your worldwide taxable sales, from all your businesses and those of any associates, pass $30,000 in one calendar quarter or over four consecutive quarters (CRA). Alberta has no provincial sales tax, so a registered Alberta business charges GST at 5% on most local sales. Registering by choice, the rule for taxi and ride-sharing drivers, timing and catching up are in when to register for GST/HST.

What do I file at tax time as an Alberta sole proprietor?

A sole proprietor reports business profit on their own T1 return, with Form T2125 (CRA). The return is due June 15 when you or your spouse or common-law partner is self-employed, but any balance owing is due April 30 (CRA dates).

The profit is taxed at personal federal and Alberta rates; Alberta's corporate rates do not apply to a sole proprietor. You also pay both the employee and employer portions of CPP contributions on Schedule 8, and EI only if you opt in (CRA). How much to set aside and instalments are in how self-employed income is taxed; which expense goes where is in T2125 expense lines.

How do I change or cancel an Alberta trade name?

Each change is its own filing; nothing updates on its own.

The registry lists no way to revive a cancelled trade name, unlike a corporation. To use a cancelled name again, file a new declaration. A buyer who trades under your old name files its own declaration.

Example

These examples are illustrative; the figures are in Canadian dollars.

A Calgary dog walker under her own name

She invoices clients under her legal name only, so she files nothing with the Alberta registry. Her sales stay under $30,000, so she has no GST/HST account and needs no BN. She earns $25,000 profit and reports it on her T1 with a T2125, filing by June 15 and paying any balance by April 30.

An Edmonton handyman trading as "Prairie Fix-It"

• Year 1: He starts using the name in March and files a Declaration of Trade Name in May, inside the 6 months. He pays the government fee of $10.61 plus the agent's charge, gets proof of filing and a BN by email. Sales of $22,000 keep him a small supplier, so he does not charge GST. He reports the profit on a T2125.
• Year 2: His sales over four consecutive quarters pass $30,000. He registers for GST/HST, which adds an RT account to the BN he already has, and starts charging GST.

The handyman takes on a partner

In year 3 a second person joins as an equal partner. They file a Declaration of Partnership within 6 months, and he cancels his trade name. The registry issues the partnership its own BN. A partnership is a separate person for GST/HST (Excise Tax Act, section 123), so it registers for GST/HST itself rather than using his account. His whole business, tools and goodwill included, goes into the partnership. Without a joint election on Form T2059, due by the earliest return due date among the partners for that year, he is taxed as if he sold them at fair market value (Income Tax Act, sections 97(2) and 96(4)). Because he is GST-registered, GST applies to the transfer unless the partnership registers first and they jointly elect on Form GST44, filed by the partnership by the due date of its GST/HST return for that period (Excise Tax Act, section 167). The partnership pays no income tax; each partner reports a share of its profit on their own return (CRA), and each is liable for its debts, including its GST/HST (Partnership Act, section 11; Excise Tax Act, section 272.1).

Different for you?

• Your sales are near or past the GST/HST limit, or you passed it without registering: see when to register for GST/HST and get individual tax help to set up the account and fix past periods.
• You missed filing your T1 with a T2125 for past years, or your books are behind: see catching up on overdue books and get individual tax help to file the missing years.
• You have no SIN or live outside Canada: get cross-border tax help to set up the business number and your first filings.
• A partner is joining: compare partnership or corporation before you file the partnership declaration, see a general partnership's first-year return, and get business formation help before any tools or goodwill move, so the T2059 and GST44 elections are made on time.
• You want liability protection or are weighing incorporation: start with sole proprietorship or corporation, then how to incorporate in Alberta and business formation help.
• You are moving an existing sole proprietorship into a corporation: follow the sole proprietor to corporation checklist and get business formation help.
• You need books set up for the T2125 and GST/HST: see setting up books for a new business and bookkeeping help.
• Your business is in another province: see registering a business in Ontario or British Columbia.