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

Buying a funeral home in New Brunswick means dealing with a licensing system that does not move with the business. Two provincial bodies sit behind it. The Financial and Consumer Services Commission is responsible for administering the Pre-arranged Funeral Services Act, and the Board for Registration of Embalmers, Funeral Directors and Funeral Providers is appointed under a separate Act, the Embalmers, Funeral Directors and Funeral Providers Act. This guide covers New Brunswick’s rules only. This guide builds on the general steps in how to buy a business in Canada. It covers only what the New Brunswick sources it cites actually say.

Who regulates a funeral home in New Brunswick

Section 2 of New Brunswick’s Pre-arranged Funeral Services Act makes the Financial and Consumer Services Commission responsible for administering the Act. Its licences are issued by the Director, which the Act defines as the Director of Consumer Affairs appointed under the Financial and Consumer Services Commission Act, including any person designated by the Commission or the Director to act on the Director’s behalf. The Act is about pre-arranged funeral plans: agreements in which a person pays in advance for funeral services for someone who is alive when the agreement is made, other than agreements paid from the proceeds of an insurance policy payable on that person’s death. The Act also provides that the Board administers a Compensation Fund, in accordance with the regulations. Ask the Director’s office and the Board what each needs from a buyer before closing.

The licences do not transfer

The central rule is section 7 of the Pre-arranged Funeral Services Act: a funeral provider’s licence or a manager’s licence issued under that Act is not transferable. A purchase agreement cannot hand the seller’s licence to the buyer. A new owner who will provide funeral services under pre-arranged plans needs a licence of its own, issued by the Director. That affects timing. Ask the Director’s office how a licence application should be sequenced against the closing date, and confirm in writing what the business may and may not do in between.

Who must hold which licence

The Act sets out two licences. The Director may issue a funeral provider’s licence if satisfied that the applicant is a reputable person and that the necessary agreements have been made with a financial institution for the deposit of, and reporting on, money to be received under the plans. The Director shall not issue it unless the applicant is a licensed Funeral Provider under the Embalmers, Funeral Directors and Funeral Providers Act, or if the applicant is in arrears on levies owed to the Board for the Compensation Fund. A licensed funeral provider must also, for each location where it carries on business in the province, employ or contract with a licensed manager, subject to the exception in subsection 6(7). The exception covers a provider who is an individual, who may be the licensed manager for one location. The Director shall not issue a manager’s licence unless the applicant is licensed as a Funeral Director under that same companion Act.

What the buyer must qualify for

Put plainly, a buyer who will provide funeral services under pre-arranged plans needs two layers. The first is the Funeral Provider licence under the Embalmers, Funeral Directors and Funeral Providers Act. The second is the provider’s licence under the Pre-arranged Funeral Services Act, which depends on the first. Each location then needs a manager who holds a manager’s licence, subject to the one-location exception for an individual provider, and a manager’s licence is issued only to a licensed Funeral Director. The companion Act was not located in a readable form for this guide, so its own conditions are not described here. Ask the Board for its current requirements, and ask the seller which staff members hold which licences and whether they intend to stay.

Pre-arranged plans and money held in trust

Money held in trust by a licensed funeral provider under a pre-arranged funeral plan must, within a period prescribed by regulation, be paid to a financial institution and deposited in trust in an account there. A licensed funeral provider must report to the Director or the Board on the plans it has undertaken, at the times the regulations set, and a compliance officer appointed by the Commission may, in a compliance review, enter a licensed provider’s premises during normal business hours and inspect, examine, audit or copy its books, records and documents. Under section 23, a licensed funeral provider may, with the consent of the purchaser or the purchaser’s legal representative, assign a pre-arranged funeral plan to another licensed funeral provider, with written notice of the assignment to the financial institution holding the account. For a buyer, that makes the plan book a core diligence item. Ask what plans are outstanding, where the trust money sits and what the latest reports and inspections showed.

Share purchase or asset purchase

If the funeral home is owned through a corporation, section 130 matters. Under section 130 of New Brunswick’s Business Corporations Act, a sale, lease or exchange of all or substantially all of a corporation’s property, other than in its ordinary course of business, requires the approval of the shareholders, subject to the exceptions in that section. So the structure of the deal matters to the seller’s shareholders. Whatever the structure, section 7 still applies: the licences issued to the existing provider and managers are not transferable, so ask the Director how the planned structure will be treated. Cremation facilities need a separate look. The Cemetery Companies Act extends a cemetery company’s powers to providing and maintaining crematoria and columbaria, so ask whether any crematorium on the site belongs to the funeral home or to a separate cemetery company.

What to ask the seller for

• The seller’s funeral provider’s licence and each manager’s licence under the Pre-arranged Funeral Services Act, with any terms and conditions the Director has imposed on them.
• The licences held by each Funeral Director and the Funeral Provider licence held under the Embalmers, Funeral Directors and Funeral Providers Act.
• A register of every pre-arranged funeral plan, with the trust account statements and the reports sent to the Director or the Board.
• Any compliance review reports, advertising material the Director asked to see, and correspondence with the Board or the Director’s office.
• Title and ownership documents for the building, any crematorium and any cemetery land, and the corporate records if shares are being sold. Search the Personal Property Registry established under New Brunswick’s Personal Property Security Act for security interests registered against the seller.