Setting up a business company in New Brunswick
Procedures and steps
Corporate Name
Should you decide to register your business company in New Brunswick, you are required to choose a name for your corporation. Alternatively, you have the option to select a numbered corporation.
- – A New Brunswick corporation’s name must conclude with one of the following: Limited, Limitée, Incorporated, Incorporée, Corporation, Ltd., Ltée, Inc., or Corp.
- – The name of a New Brunswick corporation can be in either English, French, or a combination of both languages.
- – The task of selecting a corporate name can be challenging. To enhance the likelihood of your proposed name’s approval, endeavor to opt for a name that is as distinctive as possible while accurately reflecting your business. If your proposed corporate name includes common or widely used terms, its acceptance may diminish. Additionally, you might not be permitted to use a name identical or deceptively similar to one already used by another corporation or competitor in your jurisdiction.
- – Alternatively, a New Brunswick corporation can be assigned a numerical name (for instance, 123456 New Brunswick Inc.). This expedites the incorporation process and allows for the immediate delivery of the Articles of Incorporation. The corporation can then register a trade name under which it conducts business with its customers. Although the corporation must be identified by its official name (i.e., the number followed by New Brunswick Inc. or Ltd.) for all legal and formal matters, it can use its trade name for external signage, business cards, letterhead, and other similar purposes.
Registered Office
You must designate a registered office within New Brunswick for your Company in Canada, in Brunswisk.
The registered office of a corporation is the location officially registered with the relevant government department or authority. This office can be a commercial or residential address but cannot be a post office box. You should provide the complete address.
Typically, the registered office corresponds to the primary place of business of your corporation in Canada, such as a store, plant, or office. It doesn’t necessarily have to be a physical “office.” If the corporation will operate from multiple locations, you can choose any of them.
Shareholders
You need to specify who will serve as the shareholders of the corporation.
Shareholders are individuals who possess (i.e., own) shares in the corporation. The individuals who hold these shares essentially “own” the corporation and, due to the voting rights usually associated with shares, have control over corporate decisions.
Every private corporation must have at least one shareholder, with the option to have several (up to a maximum of 50). You should have the complete residential addresses of each shareholder.
Number of shares
You must determine the number of shares allocated to each shareholder.
A corporation can issue as few or as many shares as it deems suitable. What matters most is the proportion of shares initially allocated to each shareholder, rather than the actual number. For instance, if there are two shareholders, each with a 50% interest in the corporation, it doesn’t matter whether each shareholder receives 10 shares or 10,000 shares – both receive an equal share of ownership.
However, it can be advantageous to issue a larger quantity of shares. This can facilitate the sale of a portion of these shares in the future, as each share will have a lower value. Moreover, subsequent share issuances may be more appealing to investors, given the lower value of previously issued shares. It’s not unusual for the total shares issued to all initial shareholders to equal 1000 shares, but you can adjust this number as desired.
Directors
You must decide who will serve as the directors of you Canada company.
Directors are responsible for administering the corporation’s affairs and making significant decisions.
Each corporation must have at least one director, with the possibility of having multiple directors. Directors must be individuals (physical persons), and there’s no requirement for directors to be Canadian residents.
Directors can also serve as shareholders and officers (as described below) of the corporation, which is common in small corporations. You should provide the complete residential address, Canadian residency status, and profession of each director.
Officers
You need to determine who will take on officer roles within the corporation.
Officers hold key senior management positions, such as President, Vice-President, Secretary, and Treasurer, among others.
A corporation must appoint a President and a Secretary, but officers can hold multiple positions simultaneously. For instance, one individual can serve as the President, Secretary, and Treasurer of the corporation.
Officers can also be directors and shareholders of the corporation, a common scenario in small corporations. There is no requirement for officers to be Canadian residents. You should provide the complete residential address and profession of each officer.
Fiscal year-end
You must select the fiscal year-end for the corporation.
A fiscal year represents any 12-month period that a corporation designates as its official accounting period. The fiscal year-end is the formal conclusion of the fiscal year, and it doesn’t need to coincide with December 31, although this date is often chosen.
If you have specific reasons for selecting a different date, you have the flexibility to do so.
Accountants
You have the option to choose auditors or accountants for the corporation. However, if you decide not to, you can still proceed with incorporation.
Auditors are professionals responsible for verifying the accuracy, fairness, and overall acceptability of a corporation’s accounting records. They also attest to the accuracy of these records. In general, a corporation must appoint an auditor to prepare its annual financial statements. The auditor should be a chartered accountant and cannot simultaneously serve as a director or officer of the corporation. Alternatively, you can appoint accountants to prepare the corporation’s financial statements without acting as auditors.
Shareholders of a private corporation have the ability to opt not to appoint an auditor for a specific fiscal year, provided all shareholders reach an agreement on this matter. This decision remains in effect until the next annual meeting, where shareholders must once again consent to not appointing an auditor for the subsequent fiscal year.
Incorporation packages for non-residents of Canada
As a non-resident of Canada, and having decided to incorporate a business company, you need to know that:
At least one shareholder or officer is mandatory.
There are no restrictions on authorized or issued capital.
Shares are typically issued without a designated par value.
In many Canadian provinces, specific residency requirements apply to the board of directors. However, we offer incorporation services in provinces without these residency restrictions, namely Nova Scotia, British Columbia, and New Brunswick.
Our Incorporation Packages are designed to be affordable and user-friendly. The entire process can be completed through email and/or phone consultations, and all necessary documents will be sent via international courier. The package for a company incorporated in Canada, New Brunswick, includes the following:
Complete Incorporation Package (Named Corporation)
– Registered Office.
– NUANS Name Search (if required).
– Completed Organizational Minutes, Share Certificates, Shareholders’, Directors’ & Officers’ Registers.
– Corporate Minute Book, which comprises:
– Corporate Seal.
– Standard Corporate By-laws.
– Registers & Ledgers.
– Completion and Filing of Notification pursuant to the Investment Canada Act.
– Registered Office Address for document service and mail forwarding purposes.
Corporate income tax
Corporate income tax rates in New Brunswick are applicable to companies conducting business activities within the province. The calculation of provincial corporate income tax is based on the taxable income amount, as defined by the federal government. This includes factors such as net income, capital cost allowance, and various tax deductions. Both federal and provincial corporate income taxes are managed through the annual tax return submitted to the Canada Revenue Agency (CRA).
New Brunswick has two distinct corporate income tax rates:
The lower corporate income tax rate stands at 2.5 percent (as of the 2018 tax year). This rate is applicable to taxable income generated within the province by Canadian-controlled private corporations, up to the New Brunswick business limit of $500,000. Often referred to as the Small Business Rate, it is applicable to all Canadian-controlled private corporations with limited taxable capital.
The higher income tax rate is set at 14 percent and is applied to taxable income earned in New Brunswick that does not qualify for the lower rate.
Provincial corporation tax
The administration and collection of New Brunswick’s corporate income tax fall under the jurisdiction of the federal government, specifically through the Canada Revenue Agency. New Brunswick corporate income tax rates are based on federally defined New Brunswick taxable income.
The small business rate pertains to the active business income of Canadian-controlled private corporations (CCPCs) up to a specified threshold of active business income. The advantage of the small business rate diminishes for CCPCs with taxable capital exceeding $10 million and is not applicable to those with more than $15 million in taxable capital. The general corporate income tax rate is applied to all other types of corporate income.
General corporate income tax rate
| General rate | |
| 2014 | 12% |
| 2015 | 12% |
| 2016 (April 1, 2016) | 14% |
| 2017 | 14% |
| 2018 | 14% |
| 2019 | 14% |
| 2020 | 14% |
| 2021 | 14% |
| 2022 | 14% |
Small business corporate income tax rate
| Rate | Limit (*) | |
| 2014 | 4.5% | $500,000 |
| 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 |
| 2019 | 2.5% | $500,000 |
| 2020 | 2.5% | $500,000 |
| 2021 | 2.5% | $500,000 |
| 2022 | 2.5% | $500,000 |
(*) Active business income.
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