Stewart McKelvey

popular especially for businesses based in eastern North America. We are often asked to describe the relative advan- tages of each province: • Neither Nova Scotia nor New Brunswick require any Canadian resident directors. • New Brunswick's biggest advantage is that its cor- porate statute is based on the same model as the Canada Business Corporations Act, the Business Corporations Act (Ontario) and statutes in most other Canadian jurisdictions (which follow an ap- proach familiar to US businesses and their advisors). New Brunswick corporations are often chosen be- cause the selector is already familiar with those cor- porate statutes. • Along with other features found across Canada, New Brunswick provides for "unanimous share- holder agreements" which allow shareholders to take on powers directors would otherwise have. In Nova Scotia you can get to the same place but it's more complicated and requires that these restric- tions be publicly fi led. • New Brunswick used to have the most popular stat- ute for "leverage buyout" and similar transactions where the acquired company had to guarantee or secure obligations of its acquiror. Now, Nova Scotia and British Columbia have the most fl exibility. • Nova Scotia's statute is based on the less pre- scriptive early 20th century English Companies Act which allows Nova Scotia companies to be used where a structure is required that doesn't work under the more comprehensive and form- based statutes and document models found in other provinces. For example, Nova Scotia has no statutory restrictions on companies owning shares in their parents, and Nova Scotia companies can issue shares without immediate payment in full. • Both provinces have approachable regulators. Nei- ther province has the sort of corporate regulatory bureaucracy found in the larger jurisdictions. • Nova Scotia has a modern e-fi ling system with a pub- lic Web site. New Brunswick's Web site is behind a pay-wall and most things still need to be paper fi led. • New Brunswick does not limit a company to keeping its fi nancial accounts in Canadian dollars or require use of Canadian accounting standards. Nova Scotia now allows some US based compan- ies to use US standards but continues not to have full fl exibility. • Most standard features lawyers and their clients are used to fi nding in corporate statutes are in both New Brunswick and Nova Scotia. These include statutory amalgamations, straight-forward continuance and discontinuance provisions, and fl exible capital rules. The decision whether to choose Nova Scotia, New Brunswick or another jurisdiction to incorporate in should depend on what corporate law features are most important to the particular business and should not be primarily infl uenced by the location of the com- pany's business activities. Charles Reagh Halifax, NS 902.420.3335 creagh@stewartmckelvey.com Paul Smith Saint John, NB 506.632.2787 psmith@stewartmckelvey.com Stewart McKelvey proudly celebrates over twenty years of innovative leadership as Atlantic Canada's fi rst and largest regional law fi rm. With a distinguished heritage reaching back to Canada's confederation, our law fi rm has established an international reputation for generating results. More than 220 lawyers and 350 staff in our six locations have a single objective: the best results for our clients. Charlottetown, Prince Edward Island 65 Grafton Street, P.O. Box 2140 Charlottetown, PE, C1A 8B9 Telephone: 902.892.2485 Fax: 902.566.5283 charlottetown@stewartmckelvey.com Fredericton, New Brunswick Suite 600, Frederick Square, 77 Westmorland Street P.O. Box 730, Fredericton, NB, E3B 5B4 Telephone: 506.458.1970 Fax: 506.444.8974 fredericton@stewartmckelvey.com Halifax, Nova Scotia Suite 900, Purdy's Wharf Tower One 1959 Upper Water Street, P.O. Box 997, Halifax, NS B3J 2X2 Telephone: 902.420.3200 Fax: 902.420.1417 halifax@stewartmckelvey.com Moncton, New Brunswick Suite 601, Blue Cross Centre, 644 Main Street P.O. Box 28051, Moncton, NB, E1C 9N4 Telephone: 506.853.1970 Fax: 506.858.8454 moncton@stewartmckelvey.com Saint John, New Brunswick Suite 1000, Brunswick House, 44 Chipman Hill P.O. Box 7289, Postal Station A, Saint John, NB, E2L 4S6 Telephone: 506.632.1970 Fax: 506.652.1989 saint-john@stewartmckelvey.com St. John's, Newfoundland and Labrador Suite 1100, Cabot Place, 100 New Gower Street P.O. Box 5038, St. John's, NL, A1C 5V3 Telephone: 709.722.4270 Fax: 709.722.4565 st-johns@stewartmckelvey.com

• Cover