Numbered Corporations In New Brunswick

In New Brunswick, Canada, a numbered company is a corporation that has been assigned a number as its legal name, for example, '123456 New Brunswick Inc.'. This allows for the immediate delivery of the Articles of Incorporation and speeds up the incorporation process. The corporation can then register a trade name and be known to its customers by this trade name. However, for all formal and legal matters, the corporation must be identified by its actual name, i.e. the number followed by 'New Brunswick Inc.' or 'Ltd.'.

Benefits of numbered companies in New Brunswick

A numbered company is a business that has incorporated but chosen not to adopt a specific or descriptive name. Instead, the registry assigns a number followed by the appropriate legal designation, such as Inc. While this type of company structure may not be considered consumer-friendly, it offers several benefits, particularly for businesses that do not work directly with the general public, such as companies that hold real estate titles. Here are some advantages of forming a numbered company in New Brunswick, Canada:

Simplified Setup:

Numbered companies are generally cheaper and easier to establish. They do not require an additional NUANS (New Upgraded Automated Name Search) search or the associated fees, as the company name is assigned by the government. This simplifies the process and reduces initial setup costs.

Name Uniqueness:

With a numbered company, there is no risk of confusion or similarity with other company names. The government-assigned number ensures that no two corporations have the same identifier, eliminating potential challenges or objections from other businesses.

Tax and Liability Advantages:

Numbered companies enjoy the same tax and liability advantages as named companies. New Brunswick offers competitive tax rates and financial incentives. As of 2012, the general corporate income tax rate in the province was 8%, the lowest in Canada. Additionally, energy costs are competitive, and there are multiple sources of energy available.

Confidentiality:

For businesses that prefer discretion, a numbered company can provide a level of anonymity. Without a specific name, it may be more challenging for the public to associate the company with its owners or other affiliated entities.

Streamlined Reporting:

Both named and numbered companies have the same reporting and disclosure requirements. This consistency simplifies the administrative burden, ensuring that numbered companies are not at a disadvantage in terms of compliance.

Choosing a numbered company over a named company

When starting a business in Canada, one of the first big decisions you'll need to make is whether to incorporate as a named company or a numbered company. While there is no legal difference between the two, each option has its own pros and cons.

A named company is a corporation that operates under a unique corporate name rather than a numerical identifier. For example, "Bob's Widgets Ltd." is a named company. When incorporating a named company in Canada, you can select any business name as long as it meets the basic name requirements and is not confusingly similar to a pre-existing corporate name or registered trademark. Named companies are the most common incorporation choice, especially for customer-facing businesses wanting to establish brand recognition through their name.

On the other hand, a numbered company in Canada is identified by a randomly assigned corporation number like "1234567 Canada Ltd." instead of a unique name. Numbered companies skip the name search process and are automatically assigned the next available ID number. Like named companies, numbered companies must end with a legal element such as "Ltd.," "Inc.," or "Corp."

• Reduced costs: Incorporating as a numbered company is slightly more cost-effective than incorporating as a named company, as you can avoid the cost of a NUANS name search (typically under $100).
• Uniqueness: With a numbered company, you are guaranteed a unique identifier for your business, as the number is randomly generated and assigned by the government.
• Simplicity: Numbered companies eliminate the need to come up with a unique and available name, which can be a challenging and time-consuming task.
• Flexibility: Numbered companies are often used for holding companies or businesses with a small number of clients, where relationships are more important than name recognition. They can also be useful when incorporation needs to be done by a specific date, but a name has not yet been decided.
• Administrative ease: While a numbered company can choose to operate under a trade name, it is not required to do so. This can simplify the registration process and reduce the risk of legal challenges or lawsuits associated with similar or confusing names.

However, there are also some potential drawbacks to consider when choosing a numbered company over a named company:

• Memorability: Numbered companies can be harder for customers to remember, which may impact your marketing and branding efforts.
• Administrative issues: Number mix-ups or errors could lead to administrative or legal issues, especially when creating legally binding agreements.
• Renaming costs: If you decide to change your numbered company to a named corporation in the future, it can be expensive to do so.

In conclusion, while there is no one-size-fits-all answer, choosing a numbered company over a named company can be a good option for certain types of businesses, particularly those that are not heavily reliant on customer-facing branding and marketing. It offers benefits such as reduced costs, guaranteed uniqueness, and flexibility in the incorporation process. However, it's important to also consider the potential drawbacks and seek unbiased guidance to make the right choice for your specific business needs.

Requirements for incorporating a business in New Brunswick

To incorporate a business in New Brunswick, you must submit three forms and follow the directions in the Business Corporations Act. Additionally, you must select a name for your corporation and pay for a New Brunswick NUANS search report that verifies your name is available. You must complete the incorporation process within 90 days of receiving the search report, or you must obtain a new one.

Articles of Incorporation

The Articles of Incorporation in NB require:

• Name of the corporation
• Number of shares issued
• Classes of shares issued
• Restrictions on share transfers (if any)
• Number of directors allowed
• Any restrictions on the type of business the corporation can perform
• List of the incorporators
• Contact information for the person submitting the articles

Notice of Registered Office

The Notice of Registered Office form in NB requires:

• Name of the corporation
• Address of the corporation’s registered office
• Any previous addresses the corporation used

Notice of Directors

The Notice of Directors form in NB requires:

• Name of the corporation
• Names of current directors
• Contact information for the current directors
• Names of previous directors
• Contact information for the previous directors

Other Requirements

• You must have at least one shareholder but no more than 50.
• You must select the number of shares each shareholder will have.
• You must have at least one director, who must be 18 years old, mentally competent, and not bankrupt.
• You must appoint a President and a Secretary.
• You must select the fiscal year-end of the corporation.
• You must pay a government incorporation fee of $260, plus an additional $30 for a search report if you choose a named corporation.

The role of an incorporator

A numbered company in New Brunswick, Canada, is a corporation that has been assigned a number as its legal name, for example, "123456 New Brunswick Inc.". This allows for a speedier incorporation process and the immediate delivery of the Articles of Incorporation. The corporation can then register a trade name and be known to its customers by that trade name.

Now, what about the role of an incorporator? An incorporator is an individual who initiates the incorporation process. There must be at least one incorporator, but this person has no rights or powers in the corporation. In British Columbia, the incorporator must be a shareholder and will receive some of the corporation's initial shares. However, there is no limit to the number of shares they must hold, and they can hold as little as a single non-voting common share.

In most cases, incorporators may, but do not have to be, directors or shareholders of the company after it is incorporated. Before completing the Articles of Incorporation, incorporators will have to make basic decisions about their corporation, such as where the registered office will be located, how many shares the company will issue, and how many directors will be appointed. Once the articles of incorporation and supporting documents are completed, they must be signed by at least one incorporator who is competent, at least 18 years old, and not bankrupt.

Requirements for directors, officers, and shareholders

Requirements for directors

Directors are individuals who administer the affairs of the corporation and make all major decisions for the corporation. A corporation must have at least one director, and there may be several. Only individuals 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 of the corporation.

Requirements for officers

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. There is no Canadian residency requirement for officers.

Requirements for shareholders

Shareholders are the persons who hold (i.e., own) the shares in the corporation. Every private corporation must have at least 1 shareholder and there may be several (but not more than 50) shareholders. Shareholders control the corporation through the votes that are usually attached to the shares.

Frequently asked questions