Starting a small escort business in Alberta

It is relatively easy to start a small escort business in Alberta, with excellent online resources and guides to help you out. The registration process is especially easy if you keep your business small and designed to be managed by a limited number of persons. When starting your escort business, you'll want clearly define what your business does, who manages it and who receives profits. The simpler the layout, the easier it will be to register the company and file business reports and taxes yearly. To learn why it is important to register your business, please refer to our article Don't get busted for tax evasion: Why registering your escort business is the only option.

Step one: Define and describe your business

There are several kinds of business structures applicable for running an escort business, and picking the right one for you is important. For example, someone working independently as an escort and someone running an agency would utilize two different business structures. Ask yourself these questions and your business model will start to take shape for you.

How do I define my work? What is it, in essence, that I serve? Do I supply the connections between escorts and clients, or am I myself the escort and am providing the company?
Am I the only one who will benefit monetarily from my business? If not, who else will and why are they collecting profits?
Am I the only one who will manage my business—schedule clients, hire drivers etc.? If not, will it be another owner doing this or someone I employ?
Will I be hiring regular employees to take calls, set up appointments, manage any office work on a regular basis etc., or will I maintain my business by myself?
Will I be hiring independent consultants (freelance escorts) and, if so, how do I expect to manage and pay them?
Who will fund costs such as buying advertisements in newspapers, renting an office or the cost of running a website?
Would I ever want to brand my business name or logo?
Who will be responsible for my business if I run into debt? Is this just me?
Will I ever want to sell my business?

Another step in articulating your business is to write a one-sentence summary of what the business actually does. As an escort you're registering a service you provide, rather than a product that you sell, and this service will need to be articulated on various forms and in marketing materials. Make this unique to you from the questions you've answered above, along the lines of "We provide company to our clients in a social setting".

For information on what terms you legally can and cannot use, refer to our article The fine legal line between escort and prostitute: some strategies for an escort to stay out of trouble.

Step two: Choose your business structure

Once you have a handle of what your business is and how it will be run, it's time to pick out a business structure. Below are quick definitions of the three business models that apply best to a small escorting service in Canada: a sole proprietorship, a general partnership and a corporation.

Sole Proprietorship: This is the simplest business structure, with a minimal amount of paperwork filing. One person owns and operates the business, and is responsible for all profits and losses. If you are just starting out and/or will be managing your company alone, this is what you want.
General Partnership: This retains the responsibility of a sole proprietorship, but is owned by two or more persons, called partners. In a general partnership, all partners share equal responsibility regarding funding and managing the business, as well as responsibility should the business run into financial trouble. If you have a small group of persons whose strengths will manage arranging and seeing clients, this is what you should choose. However, as you are equally responsible for losses, it can be a risky investment. Within the escort service world, it makes more sense to join into a general partnership than a limited partnership, where the financial / legal responsibility of the company is not shared equally.
Corporation: The business is a legal entity owned by shareholders and run by its directors (which will, most likely, be you). While the shareholders may invest money and collect in profits, they are not responsible for losses or claiming personal bankruptcy if the business declares such. However, if the directors are judged to be personally at fault, they may be held responsible for the unaccounted amount. This model requires a good amount of paperwork and applicable fees, and most likely the addition of an accountant and business lawyer as well. A corporation is the way to go if you have been in business for a few years, juggle many consultants and clients, and want to expand and legitimize your work on a higher platform. If that's not you, don't become a corporation.

For more information on what these mean specifically in the escorting world, and the processes for each, please refer to our articles:

For more information on these entities within Canada, visit Canada Business » Government Services for Entrepreneurs.

Step three: Create your name

Let's pretend your name is "Jane Doe". First, decide whether you simply want to call your business your name ("Jane Doe") or your name and service ("Jane Doe Escort Service"). If you use these names as a sole proprietorship or partnership, you are not required to register your business. However, if you choose to take on a name such as "Jane's Escort Service", you are considered to be functioning under a business name (also called a Doing Business As or DBA name) and will have to register it as such. Corporations, which are their own legal entities, must register their business under a business name.

If you're required to or simply want to take on a business name, have fun creating it. Do you want to be flirty and funny? Try "Jane Doe: The Company Company". Feel like being a little more discreet and want to stay out of the limelight? Try something demure, like "Jane's Social Consulting". Your name can be as simple or as flashy as you'd like, just make sure it's honest to what you want your business to be. Do you want to push the envelope of acceptability or maintain a low profile?

Registering your name doesn't require nor guarantee sole usage of the name, but you should get a feeling for if and how the name is being used in your area through a Corporate Registry Name Search.

Step four: Register your business / business name

As an escort, chances are you can contain your business to operating Alberta. Doing so means that you register your business or business name on a municipal rather than federal level as you would if you were to see clients in other regions.

In Alberta you don't actually personally register forms with a government department. Rather, you hire a private firm that has been authorized by the government to do this for you. The cost may differ slightly between firms, and if you require minimal paperwork to register you may not need as much as a service provides. To find an authorized provider, go to Service Alberta: Service Providers.

Once you've registered your business you can get your federal BN (Business Number) that will make it easier to register for business taxes and exchange business information between government offices. For more information on obtaining a BN, go to Canada Revenue Agency: Business Number Registration.

Sole proprietorship

If you choose to work under your name, you don't have to register your business. This is a smart choice if you want to keep costs and your profile to a minimum. You'll simply file your business profits/losses along with your personal taxes and hire any employees as a non-incorporated business. Details on that below.

If you choose to take on a business name, you'll have to file a Trade Name Declaration with a registered agent, which simply specifies what name you are doing business under and the owner of the company and requires a $30 filing fee plus the service charge. While the agent files this for you, you can see a sample form at Service Alberta: Forms » Trade Names and Partnerships. Filing this form does not mean you've incorporated your business, just that the government is aware that you are running a business with this name.

Partnership

A partnership registration is similar to a sole proprietorship, though in this case you are providing information about all partners involved. Once you've chosen a business name, you need to file a Declaration of Partnership with an authorized agent with a $30 filing fee plus the service charge. While the agent files this for you, you can see a sample form at Service Alberta: Forms » Trade Names and Partnerships. It simply outlines the filing partners, operating dates of the company and its purpose.

It is strongly recommended that you draft a partnership statement outlining the duties and financial lines between the partners before you start working. While this is not legally necessary, the document protects you from legal problems within the partnership rather than resorting to the laws written in the Alberta/Canada general partnership agreement. For more information on what to include in your partnership agreement and sample forms, go to Canada Legal: Partnership Agreement.

Corporation

Because of the highly intricate nature of registering a corporation it is strongly recommended that you seek advice / register through a business lawyer and choose your authorized agency wisely. You'll need to know detailed information about the amount of shares, incorporating members, public and private stock options and any functioning restrictions of the corporation. You can also find details about designing your corporation and information on all varieties of incorporations at Service Alberta: Corporations.

Once you have all this information together, you'll need to guarantee that no other corporation is functioning under the same or a similar name. If you were to register with a conflicting name, that business could challenge your registration and you could be forced to rename your company – an expensive and timely process once you've already started your business. Similarly, you don't want to take on a negative reputation from a similar-sounding company.

Before your authorized agent can file your Articles of Incorporation, you'll need to do a NUANS search (Newly Upgraded Automatic Name Search): a computerized name search that searches for the name nationally. This six-page report will be given in totality to your agent, who can then continue with registration.

While the agent files your Articles of Incorporation for you, you can see the form at Service Alberta: Forms » Corporations. And you can find more information on NUANS at the Government of Canada » NUANS.

Step five: Register for / pay business taxes

If you are a sole proprietorship or partnership, you'll report your self-employment income on your T-1 General return. Your choice of when your business year ends affects your tax bracket, so it's smart to do some research and consult with a professional when becoming familiar with self-employment taxes.
Alberta has no provincial sales tax, making it one of the most affordable provinces in which to run a small business. But as an escort you'll still need to charge the federal GST (Goods and Service Tax), regulated by the Canada Revenue Agency.
If you're a corporation, you'll pay both provincial and federal corporation taxes, keeping in mind that there are significant reductions for small businesses (those that make less than $500,000 in profits yearly). This tax is administered through the Alberta Finance and Enterprise Department and the Canada Revenue Agency.
If you have employees, you'll need to report and deduct payroll expenses at the Canada Revenue Agency. This contributes towards employment insurance, the Canadian pension plan and income tax.
If you have employees, you'll need to provide workers' compensation and enroll your business with the Workers Compensation Board of Alberta.

Step six: Get necessary licenses and permits

You may be required within your municipality to have additional licenses or permits on top of your basic business registration, depending on how you're running your business specifically within that locality. For a personalized guide on which licenses and permits you'll need to obtain, go to the BizPal Service for Alberta.

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