How to buy a funeral home in Alberta: licences, ownership rules and what transfers

Anyone planning to buy a funeral home in Alberta should start with the province’s own statutes. In Alberta, the Funeral Services Act and its General Regulation govern funeral services businesses, and the Director appointed under that Act issues the licences. A separate statute, the Cemeteries Act, applies if the business operates a crematory or owns cemetery land. This guide explains what each of those provincial rules says and what to ask the seller about before a closing date is set. It is general information, not legal advice.

Who regulates funeral homes in Alberta

Under Alberta’s Funeral Services Act, no person may solicit to enter into, or enter into, a contract under which that person promises to provide, or to arrange for the provision of, funeral services to another person unless that person holds a funeral services business licence; the Act lets the Lieutenant Governor in Council exempt persons or businesses by regulation. A licence application goes to the Director, who may issue a licence if the applicant meets the requirements set out in the regulations, and may issue it subject to any terms and conditions the Director considers appropriate. A licence is valid for the period the regulations specify, or until the Director suspends or cancels it. Under the General Regulation, a business licence and any renewal expire on the March 31 following issue, so the renewal date matters when you plan a closing.

One licence for each location

Alberta’s General Regulation requires a funeral services business to hold a separate licence for each of its business locations. If you are buying a business with more than one chapel or office, ask the seller for a list showing which licence covers which address and when each expires. The sources used for this guide do not say that a licence passes automatically to a buyer, so confirm with the Director’s office, before you sign, what a change of ownership requires and whether the buyer must apply in its own name.

The business manager and who runs the business

The Funeral Services Act bars anyone from performing the duties of a business manager, as the regulations prescribe, unless that person holds a business manager licence. Under the General Regulation, each funeral services business must appoint a person who holds a business manager licence to act as its business manager, although a business with more than one location may appoint one business manager for all of them. If the appointment changes, the business must give the Director written notice within 7 days and name the replacement. A buyer who is not already licensed should ask who will hold that role on the first day of ownership, and whether the current manager will stay.

Changes in ownership and operations you must report

Alberta’s General Regulation requires a funeral services business licensee to give the Director written notice within 10 days of any change of address for service, any change in the officers of a company or the partners of a partnership, and the date on which the business or any of its locations goes out of business or otherwise stops operating. In a share purchase, the officers may change at closing even though the licensee stays the same. Ask your lawyer to map each of those notices to the closing timeline and to check the Act and regulation for any further step.

Pre-need contracts and trust money

Under the General Regulation, a funeral services business licence authorizes pre-need contracts with members of the public only if the licence specifically states that authorization. The Funeral Services Act says a licensee that enters into a pre-need contract holds the money paid in trust until the services are provided or the money is refunded. The regulation bars a licensee from cancelling, amending or varying the trust agreement, standard pre-need contract form or insurance agency agreement filed with its licence application unless it obtains the Director’s prior written approval and pays the prescribed fee. Under section 11, a pre-need contract may be assigned to a licensee in accordance with the regulations, and the Act deals with moving the related trust money. Ask how many pre-need contracts exist and where the money sits.

Crematories and cemetery land

If the business includes a crematory, Alberta’s Cemeteries Act says no human bodies may be cremated in a crematory, and no crematory may be maintained or operated, unless the owner of the crematory holds a licence for that purpose. The same Act says land used for a cemetery, columbarium or mausoleum may not be sold, transferred, mortgaged, pledged, hypothecated, charged or encumbered by the owner or any person having an interest in it, except with the consent of the Director under that Act and in accordance with any conditions the Director imposes. A sale made in contravention after April 15, 1974 is void. Under the Cemeteries General Regulation, a pre-need contract may be cancelled at any time, but the period in which it may be cancelled without charge or penalty is 30 days from the date the purchaser receives a copy of the contract.

What to ask the seller for

• Every current funeral services business licence, with the address it covers and its expiry date.
• The business manager’s licence and the date of the appointment on file with the Director.
• The pre-need contract register, the trust fund agreement and the Director’s approvals of the contract forms and trust documents.
• Copies of notices given to the Director about officers, partners, addresses or locations that stopped operating.
• Any crematory licence, and any Director’s consent under the Cemeteries Act that affects the property.

For a wider look at licensing in an Alberta sale, read licences and permits in an Alberta business sale, and for the overall process see how to buy a business in Canada.