Legal information

  • It is important to distinguish between the business and the corporation that operates the business. A business may exist before it is incorporated, for example, if it is operated as a sole proprietorship or partnership. The business can be incorporated at different times, depending on a number of factors that can make incorporation advantageous at certain times. In this article, we propose different times when it is possible to
  • Corporations (incorporated businesses) are subject to important formalities, which make it important to distinguish between the decision-making powers of shareholders and directors. While the board of directors "exercises all the powers necessary to manage the business and affairs of the corporation or to supervise its management" (s. 112, ICA), shareholders have much more limited but still fundamental decision-making powers. Here is
  • One of the first decisions of the board of directors, following the incorporation of the company, will be to authorize the issuance of shares, at the price determined by the directors. How many shares to issue to the founders of the company, and at what price? Number of shares From the outset, it should be noted that the share capital in Quebec and in Canada is by default unlimited, unless otherwise stipulated in the articles of incorporation. This simply means that the directors can decide to issue as many shares as they wish, unless otherwise provided for in the articles. Generally,
  • It is important to file the annual update prescribed by law with the Enterprise Registrar (or with Corporations Canada, for federal corporations), in order to avoid late penalties, but also to avoid the dissolution of the corporation . Indeed, the Legal Publicity of Enterprises Act provides, in its section 59, that any failure to produce the annual update for two consecutive years may result in
  • The board of directors plays a fundamental role in a corporation. Indeed, it has broad management powers since it is the main decision-making body. Throughout their term of office, the directors are called upon to manage the activities and internal affairs of the company in its best interests. To ensure the sound administration of corporations, the Quebec and federal legislators have set out various conditions of eligibility for the position
  • What is a trademark? A trade mark is a combination of letters, words, sounds or symbols that identify and distinguish the goods and services of one company from those of another. Trademarks are valuable intellectual property assets because they reflect your company's identity and are an effective way to build your reputation and gain recognition. A good trade mark increases
  • In Canada, a corporation may be incorporated under either provincial (in this case, Quebec law) or federal legislation. There are differences between these two incorporation regimes, although there are not really any fundamental differences. Ultimately, a provincial corporation is not necessarily limited to the territory of the province in which it is incorporated to carry on its activities; and conversely, a federal corporation may very well carry on business locally without having a local focus.
  • It is common in family business structures that the shareholder of the company is not the founder of the company directly, but rather a family trust, with the founder and all family members as beneficiaries. The trust may become a shareholder at the start of the business, but more often it will become a shareholder on the occasion of a share freeze, when the business has reached a certain value and profitability. Here is an overview of
  • A unique feature of Canadian tax and corporate law is the use of the share freeze in the context of a reorganization of a corporation. This article provides a general and introductory overview of the share freeze. What is a share freeze? A share freeze generally involves the exchange or conversion of common shares into redeemable preferred shares that will be valued at the fair market value of the common shares

 

The information contained in the articles on the IncorporationQuebec.net website does not constitute legal opinions, and is only general information intended to popularise certain legal concepts relating to company law or SME taxation. The information contained in the articles may not be applicable to certain specific cases. Pronto Corporate Services Inc. and the author of the texts are not responsible for any error, inaccuracy or out-of-date information that may be contained in the articles.

April 20, 2021

Registration in the tax accounts

A newly created corporation must register for different accounts with the Canada Revenue Agency and Revenu Québec. A first account, which is
April 25, 2021

Registered vs. Incorporated

Many start-up entrepreneurs wonder whether they should be "registered" or "incorporated". The differences between these two ways of running a business are
May 3, 2021

How to incorporate a business in Quebec

It is recommended that a professional (lawyer or notary) be mandated to set up a corporation. Indeed, in addition to filing the articles of association
May 3, 2021

Discretionary shares

What are they? Since the Supreme Court of Canada recognised the legality of discretionary dividend shares, they have been widely used by
May 7, 2021

The importance of company rules

The rules of procedure (or by-laws for federal societies) are a major document in the organisation of a corporation. The rules usually contain procedures
May 13, 2021

Incorporation of professionals

A member of a professional order governed by the Professional Code may carry on his professional activities within a corporation under certain conditions. Article
May 20, 2021

Shareholders' agreement and withdrawal from the business

The shareholders' agreement is a very important document when several people (at least two) decide to join together and run a business through a company
June 5, 2021

Certificated or uncertified shares?

Unlike Canadian law, the Quebec Business Corporations Act allows the shares issued by the corporation to be uncertificated. This
June 9, 2021

Overview of the Company Book Registers

A company book usually contains several registers, which are sometimes required by law and sometimes not. The register is probably the most important,