Setting up in New Brunswick
Procedures and steps
Name of the company
- A New Brunswick corporation’s name must end with one of the following: Limited, Limitée, Incorporated, Incorporée, Corporation, Ltd., Ltée, Inc. or Corp.
- A New Brunswick corporation’s name may be in English, French or it may have a version in both languages.
- Choosing a corporate name can be a difficult task. To increase the chances of your proposed name being accepted, try to select a name that is as distinct as possible, yet accurately describes your business. If your proposed corporate name uses common or popular names, the chances of it being accepted decrease. Furthermore, you may not be allowed to use a name which is either identical or deceptively similar to one that is already used by another corporation or competitor in your jurisdiction.
- Alternatively, a New Brunswick corporation may be assigned a number as its legal name (for example, 123456 New Brunswick Inc.). This speeds up the incorporating process and permits immediate delivery of the Articles of Incorporation. The corporation may then register a trade name and be known to its customers as doing business under the trade name. Although the corporation must be identified by its actual name (i.e., the number followed by New Brunswick Inc. or Ltd.) for all formal and legal matters and relations (e.g., contracts), the corporation may use its trade name for exterior signs, business cards, letterhead, etc.
- The registered office of a corporation is the location officially designated as such by the corporation to the relevant government department or authority. The registered office may be a commercial or residential address, but should not be a post office box. You will need the complete address.
- The registered office is typically the principal place of business of the corporation (e.g., store, plant or office) and does not have to actually be an “office”. If the corporation will have more than one place of business, you may select any of the places of business.
- Shareholders are the person(s) who hold (i.e., own) the shares in the corporation. Whoever holds the shares of a corporation essentially “owns” the corporation. By reason of the votes that are usually attached to the shares, the shareholders control the corporation.
- Every private corporation must have at least 1 shareholder and there may be several (but not more than 50) shareholders.
- You will need the complete residential address of each shareholder.
Number of shares
You must select the number of shares each shareholder will have.
- A corporation may issue as few or as many shares as it deems desirable. The crucial matter is the proportion of shares that is initially issued to each shareholder, rather than the actual number. For example, if there are 2 shareholders and each is to have a 50% interest in the corporation, it is irrelevant whether each shareholder receives 10 shares or 10,000 shares each, since in either case, both receive an equal proportion of the shares.
- Nonetheless, it may be advantageous to issue a larger amount of shares. It may facilitate selling a portion of these shares at a later date since each share will have a lower value. Also, subsequent share issues from the corporation may be more attractive to investors since the value of the shares would be lower given the larger number of shares that were already issued.
- It is not uncommon for the total amount of shares issued to all initial shareholders to equal 1000 shares. However, you may decide to increase or decrease this amount.
You must decide who will be the directors of the corporation.
- Directors are the individuals who administer the affairs of the corporation and make all major decisions for the corporation.
- Every corporation must have at least 1 director, and there may be several. Only individuals (i.e., physical persons) may be directors of a corporation.
- A New Brunswick corporation DOES NOT require that any directors be Canadian residents.
- Directors may also be shareholders and officers (see below) of the corporation. In fact, this is typical in small corporations.
- You will need to know the following for each director: their complete residential address, whether they are Canadian residents and their profession.
- Officers are the persons who hold certain senior management positions, such as President, Vice-President, Secretary and Treasurer, among others.
- A corporation must appoint a President and a Secretary.
- Officers may hold more than one office or position. For example, an individual may be the President, Secretary and Treasurer of the corporation.
- Officers may also be directors and shareholders of the corporation. In fact, this is typical in small corporations. There is no Canadian residency requirement for officers.
- You will need to know the following for each officer: their complete residential address and their profession.
- A fiscal year is any 12-month period used by a corporation as its official accounting period. A fiscal year-end is the official last day of the fiscal year of a corporation. The fiscal year-end does not need to be December 31, but is typically the last day of the chosen month.
- It is not uncommon for corporations to select December 31 as their fiscal year-end. However, you may change this date if you have specific reasons for doing so.
- Auditors are the professionals who check the accuracy, fairness and general acceptability of a corporation’s accounting records and attests to them. A corporation must generally appoint an auditor to prepare the annual financial statements of the corporation. The auditor should be a chartered accountant and cannot be a director or officer of the corporation. Alternatively, you may appoint accountants to prepare the financial statements of the corporation but who will not act as auditors of the corporation.
- Shareholders of a private corporation may choose not to appoint an auditor for any given fiscal year. All the shareholders must agree to this decision. This decision remains valid only until the next annual meeting, where all the shareholders of the corporation must once again consent to not appointing an auditor for the following fiscal year.
Incorporation packages for non-residents of Canada
A minimum of one shareholder/officer is required.
There are no restrictions on the authorized or issued capital.
Shares are normally issued at no par value.
Most Canadian provinces have residency restrictions for the board of directors. We can provide incorporation services in provinces which do not have residency restrictions. Those provinces are Nova Scotia, British Columbia and New Brunswick.
Our Incorporation Packages are affordable and simple to use. The process is completed by email and/or phone consultation and all documents are couriered via international courier. The inclusions and costs are as follows:
Complete Incorporation Package (named corporation)
- Registered Office.
- NUANS Name Search (if required).
- Completed Organizational Minutes, Share Certificates, Shareholders’, Directors’ & Officers’ Registers.
- Corporate Minute Book including:
- Corporate Seal.
- Standard Corporate by-laws.
- Registers & Ledgers.
- Completion and Filing of Notification pursuant to the Investment Canada Act.
- Registered Office Address for service of documents and mail forwarding purposes.
Corporate income tax
There are two corporate income tax rates in New Brunswick:
- The lower corporate income tax rate is 2.5 per cent (as of the 2018 tax year). This rate applies to taxable income earned in the province of Canadian-controlled private corporation up to the New Brunswick business limit of $500,000. This rate is also known as the Small Business Rate and applies to all Canadian-controlled private corporation with limited taxable capital.
- The higher rate of income tax is 14 percent. This rate applies to taxable income earned in New Brunswick that does not qualify for the lower rate.
Provincial corporation tax
The small business rate applies to active business income of Canadian controlled private corporations (CCPCs) up to the threshold amount of active business income. The benefit of the small business rate is reduced for CCPCs with taxable capital of more than $10 million and is not applicable to CCPCs with more than $15 million in taxable capital. The general corporate income tax rate is applied to all other corporate income.
General corporate income tax rate
|2016 (April 1, 2016)||14%|
Small business corporate income tax rate
|2015 (Jan. 1, 2015)||4%||$500,000|
|2016 (April 1, 2016)||3.5%||$500,000|
|2017 (April 1, 2017)||3%||$500,000|
|2018 (April 1, 2018)||2.5%||$500,000|
(*) Active business income.
Our company licensing services
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Disclaimer: While TBA & Associates strives to make the information on this website as timely and accurate as possible, the information itself is for reference purposes only. You should not substitute the information provided in this article for competent legal advice. Feel free to contact TBA Customer Services for advice on your specific cases.