For many small business owners, deciding to incorporate is a big step that signals growth, structure, and long-term planning. When it comes time to take that big step, you may ask yourself: Do I need a lawyer?

The short answer? Not always—but it depends on your situation.

Let’s walk through the key considerations.

What Does It Mean to Incorporate?

Incorporating creates a legal entity that is separate from its owners. This new entity—a person in the eyes of the law—can enter into contracts, own property, hire employees, and be taxed independently. One of the biggest advantages of incorporating is limited liability: shareholders are generally not personally responsible for the corporation’s debts.

Another major reason people incorporate is taxation. If your business is earning enough money that you want to defer personal taxation by choosing to pay yourself less in a given year than your business earned, you can typically only do this through a corporation. Your accountant can advise you when you’ve reached a point where there may be tax advantages to incorporating.

In Canada, you can incorporate either federally or provincially. Most small businesses in Sussex and throughout New Brunswick should choose provincial incorporation, which is handled through SNB Corporate Affairs.

Can You Incorporate on Your Own?

Yes, you can. Many entrepreneurs use SNB’s online portal to incorporate directly. This route is relatively straightforward for simple businesses, especially if you are:

• The sole director and shareholder
• Not planning to bring on partners or investors anytime soon
• Operating a business with low legal risk
• Not planning to issue different classes of shares or customize your share structure
• Not planning to transfer any property into the corporation’s ownership

In these cases, a do-it-yourself incorporation can work—but it comes with caveats.

If you choose to do this yourself, be careful. We frequently see mistakes that clients made during a DIY incorporation—mistakes we’re later hired to fix. These include incorporating in the wrong jurisdiction, using a share structure that doesn’t allow for flexibility or growth, or failing to prepare essential documents. These missteps can be costly to correct.

When a Lawyer Becomes Essential

There are several situations where involving a lawyer can save you time, money, and potential legal trouble down the road:

1. Customized Share Structure

Not all corporations are created equal. If you’re planning for different classes of shares (e.g., common and preferred shares), dividend planning, or succession planning, legal and accounting advice is crucial to set things up properly. If there is any significant complexity to your corporation, your accountant and lawyer will work together to ensure your corporation is tailored directly to your needs.

2. Professional Corporations

Lawyers, accountants, physicians, and other regulated professionals have special rules around incorporation. If you’re setting up a professional corporation, you may need legal assistance to meet your regulatory body’s requirements.

3. Multiple Shareholders or Partners

If more than one person is involved in ownership, you may want to define each party’s rights and responsibilities with a shareholders’ agreement—something best handled by a lawyer.

4. Long-Term Planning

Thinking about bringing in investors? Transitioning your business to family members? Selling the business one day? A lawyer can help you structure the corporation with the future in mind and make sure everything is set up correctly from the start to avoid complications down the road.

What a Lawyer Actually Does When You Incorporate

A lawyer does more than just file forms. When we incorporate a business for a client, we typically:

• Search and reserve their preferred corporate name
• Draft custom Articles of Incorporation, often with input from their accountant
• Prepare the corporation’s by-laws and incorporating resolutions to ensure the corporation is compliant with the New Brunswick Business Corporations Act
• Issue and record share certificates, so the corporation’s ownership is clearly reflected
• Create your minute book, which acts as a record of all corporate activity and is essential to have if you ever intend to sell your business
• Draft a shareholders’ agreement (if needed)
• Provide advice on structure, ownership, and tax implications in collaboration with your accountant

It’s not just about ticking boxes—it’s about setting your business up on a solid legal foundation.

So—Do You Need a Lawyer?

If your business is simple and you’re comfortable doing some research, you might not need one to get incorporated.

But if you’re investing serious time and money into your business, have partners or shareholders, or want to ensure things are done right the first time—then yes, it’s worth involving a lawyer early on.

It can help you avoid costly mistakes, protect your interests, and give you peace of mind as you grow.

Thinking About Incorporating?

At Malone Freeze Law, we help entrepreneurs and professionals in Sussex and throughout New Brunswick incorporate with confidence. Whether you’re starting fresh or restructuring an existing business, we’re happy to answer your questions—and help you decide whether incorporation is right for you.

 

The information provided here is for general informational purposes only and does not constitute legal advice. Every individual’s situation is unique, and the laws governing corporations in New Brunswick  may change over time or differ based on specific circumstances. We recommend consulting with a qualified lawyer to discuss your particular situation before making any legal decisions