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______________________________________________________________________________Stewart McKelveyDoing Business in Atlantic CanadaCompanies are managed on a day-to-day basis by the directors and officers of the company. Theshareholder’s role is generally limited to matters prescribed by the NLCA, including electing directors andfundamental corporate changes. Certain matters, such as changes to the share capital or a change inthe name of the company, are required to be dealt with by special resolution, which must be approved byat least a two-thirds vote of the shareholders or a unanimous written resolution.Every Newfoundland and Labrador company must register with the Registrar of Companies pursuant tothe NLCA. A name reservation is required prior to the registration of a company name. A company nameis required to have both a descriptive and distinctive element. For example, ABC Inc. will not satisfy theRegistrar of Companies, whereas ABC Software Inc. will likely be acceptable as it provides an indicationof the nature of the company’s business. Companies are also required to have a “registered office” inNewfoundland and Labrador where certain corporate (but not financial) records are required to bemaintained.Each year, the company must file an annual renewal of its registration together with an updated list of thedirectors of the company and their civic addresses. If a company is not in good standing under the NLCAit may not bring or maintain an action in any court in Newfoundland and Labrador. In addition, it is subjectto a fine for non-compliance and is susceptible to being struck from the Registry.Newfoundland and Labrador has an Innu Business Registry which maintains a listing of all InnuBusinesses. An Innu Business is a business organization in which the Innu have at least 51% ownershipor effective control. All types of business organizations that meet the established criteria are eligible to beregistered at the Innu Business Registry. Registration is a requirement in order to avail of certainbusiness opportunities and there is no fee for registration.Nova Scotia Unlimited CompaniesAn unlimited company is a distinct form of legal entity which may be formed under the NSCA. Like limitedcompanies, unlimited companies are registered under the NSCA by filing signed constating documentswith the Registrar of Joint Stock Companies. However, unlike a limited company, the shareholders of anunlimited company will, by definition, have unlimited joint and several liability for the obligations of thecompany upon its dissolution. Unlike the partners of a partnership (which is discussed below), theshareholders of an unlimited company have no direct liability to creditors of the company; theirresponsibilities only arise when the entity is liquidated with insufficient assets to satisfy its obligations.Unlimited companies are useful from a U.S. tax planning perspective. Under U.S. tax regulations, due tothe unlimited nature of unlimited companies, they are eligible to elect partnership treatment (or elect to bedisregarded), and as a result for U.S. tax purposes any income or losses of the unlimited company maythereby be taxed in the hands of the shareholders.Prior to 2005, Nova Scotia was the only Canadian jurisdiction that permitted the formation of unlimitedliability companies (“ULCs”). However, since then amendments to Alberta’s Business Corporations Actin 2005 and British Columbia’s Business Corporations Act in 2007 have permitted the formation of ULCsin Alberta and British Columbia as well.The legislative regimes governing ULCs in Nova Scotia, Alberta and British Columbia have somesubstantive differences. The NSCA is derived from English partnership law. Nova Scotia ULCs(“NSULCs”) are created under the NSCA and are governed by 150 years of case law in England andelsewhere. Alberta and British Columbia’s Business Corporations Acts are similar to other modernCanadian corporate statutes. Because the unlimited liability concept is novel in a statute of this kind, thereare compatibility issues to be resolved and little applicable judicial authority. On the other hand, theAlberta and British Columbia statutes are better able to address modern Canadian corporate conceptsthan the NSCA.One of the most significant differences between ULCs in the different jurisdictions is the nature ofshareholder liability. Under the Nova Scotia legislation, shareholders have no direct liability to creditors ofthe ULC; rather, liability arises on a winding up. For the shareholders to be liable, the creditors mustPage 12