Business Law Tools

The information provided in this brochure is of a general nature and is not intended to be taken as the giving of an opinion by the law firm of Murphy Collette Murphy or any of its members.

Specific advice should be sought on particular situations from your lawyer. © 1994, 2001, 2005 Henry J. Murphy

INTRODUCTION

We have prepared this brochure in the hope that a little better understanding of what is involved in incorporating a business will assist you in avoiding the pitfalls. It is not meant to be exhaustive but rather just a tool to supplement what you will get out of the candid discussions that will evolve between you and the lawyer representing you here at our firm.

Set a Budget

The incorporation process can quickly eat in to your wallet therefore budget for not only filing fees and legal fees but for such other incidentals as business licenses, start-up supplies like business cheques, letterhead, invoices, etc.

Speak with a lawyer

Whether you need to actually hire a lawyer will depend upon the complexity of your business. Some one director corporations can be incorporated by yourself with forms available through the Province of New Brunswick Director of Corporations. Other incorporations, where for instance there are several shareholders and buy-sell agreements required, should be discussed with your 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.

Buy-sell Agreement

buy-sell agreement is essentially a contract between the principals of the company that provides that if a shareholder or his heirs wants to sell shares certain procedures have to be followed. It will specify who must buy the shares and at what price. This can be more complicated than you might think at first glance and if it is neglected you may find it difficult to arrive at an agreement later.

Get tax numbers

Before you can open bank accounts or hire employees you should know what the registration requirements are for the Goods and Services Tax, Provincial Sales Tax, Income Tax employee deductions, Workers' Compensation, and local municipal by-laws.

Separate Accounts

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.

Murphy Collette Murphy

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Murphy Collette Murphy has been a leading provider of insurance related legal services to a variety of property and casualty insurers for over 20 years.The senior partners of the law firm, Henry J. Murphy and J. William Collette, practiced together for a number of years before establishing the firm in 1991.

Address: 250 Lutz Street Moncton, New Brunswick E1C 5G3
Telephone: 506.856.8560
Telecopier: 506.856.8579
Email: manager@murco.nb.ca