How to buy a funeral home in Prince Edward Island: licences, ownership rules and what transfers

People searching for how to buy a funeral home in Prince Edward Island will find that the licensing body is a board, not a government registrar. The Prince Edward Island Funeral Services and Professions Board directs a Registrar, appointed from among its own members, to issue licences under the province’s Funeral Services and Professions Act. A second statute, the Prearranged Funeral Services Act, covers money paid in advance for funerals. The texts posted by the province carry “current to” dates that are now old, so this guide attributes each rule to the consolidation it read and sends the buyer to the Board to confirm. This guide covers Prince Edward Island only.

Who regulates funeral homes in Prince Edward Island

The Act defines the Board as the Prince Edward Island Funeral Services and Professions Board, and provides that the Board appoints a Registrar from among its members. The Registrar keeps the Register, and a licensee must notify the Registrar without delay of any change in the licensee’s information in it. In the posted consolidation, the Board directs the Registrar to issue a Funeral Home Operator’s Licence, subject to section 28, to an applicant to operate a funeral home under the name and at the premises specified. Ask the Board for the current form and the steps it follows.

What the licence covers

The Act says no person may operate, or hold themselves out as the operator of, a funeral home without the matching licence. A Funeral Home Operator’s Licence applies in respect of a single funeral home at the location specified on the licence. A buyer of a business with more than one location should therefore ask for a licence for each location rather than assume one licence covers the group. The Act licenses embalming facilities and transfer services separately, so check whether the business runs either.

The premises test

Among the Board’s tests for a Funeral Home Operator’s Licence, the consolidation lists that the applicant owns, rents or leases the premises specified in the application, and that the premises meet the minimum standards in the regulations. That makes the real estate part of the licensing question. If the seller owns the building, the purchase terms need to give the buyer ownership or a lease. If the seller leases it, the buyer should read the lease for assignment rights before the application is filed.

What transfers on a sale, and what does not

The Act states, “A license is not transferable.” A buyer should therefore plan to apply for its own licence instead of taking over the seller’s. The Act also lets a licensee surrender a licence to the Registrar at any time, and requires a licensee to notify the Registrar without delay of changes in the information in the Register. The General Regulations likewise require notifying the Registrar promptly of changes in information. No fixed advance sale-notice period was found in the consolidations read, so ask the Board how it wants timing and notice handled.

Prepaid funeral plans

Under the Prearranged Funeral Services Act, a vendor who enters into a prearranged funeral plan must hold in trust all money paid under it, other than any sum retained under subsection 3(2). The Act provides that a vendor may, with the consent of the person making or who has completed the payments, assign a plan to another person with notice in writing to the institution, and that when it is assigned the institution holding the trust account makes the changes in its records needed to complete the assignment. If the assignee’s trust account is kept elsewhere, the money held under the plan may be transferred to it on payment of the institution’s charges and fees. Ask the seller how many plans are outstanding and which institution holds each trust account.

What to ask the seller for

• A copy of the Funeral Home Operator’s Licence and the name and premises it specifies.
• Proof of who owns the premises, or the lease and the landlord’s position on assignment.
• The Register information held for the business and any notices filed with the Registrar.
• A list of prearranged funeral plans with the trust account for each and the institution that holds it.
• Any licences for an embalming facility or a transfer service that the business uses.

The Canada Revenue Agency lists steps for a seller, including contacting its tax services office about the business number and the GST/HST account, and closing the payroll account if the business has employees. For the overall steps, see how to buy a business in Canada.