Business Law Tools
The following compiled information is of a general nature and is not intended to be taken as the given opinion of Murphy Collette Murphy or any of its members.
Specific advice should be sought on particular situations from your lawyer.
We’ve compiled this information with the objective to provide a better understanding of what incorporating a business entails and to help you avoid common pitfalls. The following isn’t meant to be exhaustive but rather a reference of what to expect from a candid discussions between you and your lawyer.
Set a Budget
The incorporation process can quickly eat at your wallet. Therefore, aside for filing fees and legal fees, budget for other incidentals, including business licenses, start-up supplies (like business cheques), letterhead, invoices, etc.
Speak With a Lawyer
Hiring a lawyer will depend on the complexity of your business. Some one-director corporations can be incorporated on your own using forms provided by the Province of New Brunswick Director of Corporations. Other incorporations, where there are several shareholders and buy-sell agreements required, should be discussed with a lawyer.
The final property settlement may be set up so that one spouse does not actually make payments on the marital debts. However, that person's share of debt is still accounted for in the division of marital property between the spouses.
A buy-sell agreement is a contract between the principals of the company that explains the procedures when a shareholder or his heirs want to sell shares. It specifies who must buy the shares and at what price. This can be more complicated than you might think at first glance. If neglected, you may find it difficult to arrive at an agreement later.
Get Tax Numbers
Before you can open bank accounts or hire employees, familiarize yourself with registration requirements for the Goods and Services Tax, Provincial Sales Tax, Income Tax employee deductions, Workers' Compensation, and local municipal bylaws.
Avoid the temptation to continue to use your regular bank account with your accounting software. If the new corporation does not keep separate financial records, you risk having the income tax department not recognizing the corporate veil.
Pro Forma Financial Statements
Finally, and perhaps most importantly, prepare pro forma financial statements to assist you in calculating your after tax income position after the incorporation. You might just find that you are treated more harshly by the Receiver General than you are now.