Registering a Business in New Brunswick. The process of registering a business varies from province to province. Here’s an overview of how you would register a business in New Brunswick:
STEP 1: SELECTING THE TYPE OF BUSINESS
The first step is to identify what type of business you want to operate, and the type of identity (sole proprietorship, partnership or corporation) that will meet your needs. A lawyer or accountant should be consulted if you are not sure which type of business best meets your needs.
STEP 2: REGISTERING YOUR BUSINESS
Once you have determined the type of business you wish to register, you will need to decide on a name. You can check that your desired business name has not been taken by requesting a list of private sector name search firms, available from Corporate Affairs Branch (see contact details below). Once you have chosen a name, you will be required to pay a fee in order to reserve all legal rights to the name.
REGISTERING A NEW BRUNSWICK CORPORATION
A corporation created under the Business Corporations Act (New Brunswick) (the“NBBCA”) is a distinct legal entity
with all of the powers of a natural person. Directors under the NBBCA are elected by the corporation’s shareholders
and are responsible for the day to day management of the business and affairs of the corporation.
The liability of a NBBCA corporation’s shareholders is generally restricted to the amount of their investment.
Shareholders are not liable for any of the liabilities of the corporation unless they are a party to a unanimous
shareholder agreement that restricts the director’s decision making authority. A shareholder in this case assumes
the directors’ liability associated with any of the director’s decision making authority restricted by the unanimous
shareholders agreement.
A computerized name search must be performed prior to incorporation to determine the availability of the desired
name for the corporation. This is known as an NUANS name search and it generally takes up to two business days
to complete. Under the NBBCA a corporation is incorporated by filing Articles of Incorporation (“Articles”), a Notice
of Registered Office and a Notice of Directors.
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REGISTERING A SOLE PROPRIETORSHIP IN NEW BRUNSWICK
A sole proprietorship is the simplest form of business enterprise. A proprietorship carrying on business in New
Brunswick must be registered under the Partnerships and Business Names Registration Act (New Brunswick) unless
the business is solely operated in the proprietor’s name. The proprietor performs all functions of the business and
bears unlimited liability for all liabilities of the business. Both the proprietor’s business and personal assets may be
used to satisfy these liabilities.
One benefit of operating through a proprietorship is the low cost of the organization. If start-up losses are expected,
then proprietorship may offer the additional advantage of allowing the proprietor to claim those losses as a
deduction for income tax purposes against other sources of income. To succeed in making such a deduction, the
proprietor may be required to demonstrate that they have a reasonable expectation of earning a cumulative profit
from the business enterprise. As with proposed corporate names, an NUANS name search is required for proposed
business name registrations under the Partnerships and Business Names Registration Act (New Brunswick).
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REGISTERING A GENERAL PARTNERSHIP IN NEW BRUNSWICK
A partnership is a relationship that exists between two or more persons carrying on a business in common with
a view of profit. In New Brunswick, the Partnership Act (New Brunswick) governs general partnerships, although
most of the provisions of the Partnership Act (New Brunswick) relate to matters which are usually addressed in a
partnership agreement. With few exceptions, the provisions of the Partnership Act (New Brunswick) are subject
to an agreement to the contrary made by the partners. A partnership must also maintain an annual
registration under the Partnerships and Business Names Registration Act (New Brunswick).
Parties who wish to carry on a business in common through a partnership structure should enter into a partnership
agreement. Partnership agreements generally outline the rights, interests, and responsibilities of each partner. A
partnership allows individuals or corporations to pool resources and divide management responsibilities. However
it is noteworthy that each partner is held liable for all the debts and liabilities of the partnership that arose while
that person was a partner. This includes liability for any wrongful act or omission of any partner carrying acting in
the ordinary course of the partnership business. Every partner is also considered to be an agent of the partnership
and the other partners with respect to the partnership business, enabling any partner to enter into an agreement
which binds all of the partners.
Partnerships may provide for more flexible income and loss sharing arrangements than corporations can provide.
Subject to the terms of the partnership agreement, all partners are entitled to participate in the management
of the partnership business. Each partner must report its share of the partnership income or loss for income
tax purposes. A partnership is deemed to be dissolved upon the death or insolvency of any partner unless the
partnership agreement specifically specifies that the partnership will continue in such circumstances.
REGISTERING A LIMITED PARTNERSHIP IN NEW BRUNSWICK
The Limited Partnership Act (New Brunswick) governs limited partnerships; however, the Partnership Act (New
Brunswick) also applies to a limited partnership to the extent that it is not inconsistent with the Limited Partnership
Act (New Brunswick). A limited partnership may be formed to carry on any business that a partnership without
limited partners may carry on.
In a limited partnership, a distinction is drawn between those partners who contribute management efforts to
the partnership (a general partner) and those partners who contribute only capital to the partnership (a limited
partner). Every New Brunswick limited partnership must have a minimum of one limited partner. A limited partner
is liable only to the extent of its capital contribution; however, this limited liability is lost if the limited partner
provides services to or participates in the management of the partnership business.
A limited partnership is formed when a declaration is filed with Service New Brunswick containing the following
information:
the firm name under which the limited partnership is to be conducted;
the general nature of the business;
the principal place of business; and
the name and place of residence of each general partner
