Legal information

  • In general, the articles of incorporation of a company provide for different classes of shares as authorised share capital. Authorised share capital means that these shares can be issued by the company, but are not necessarily issued. Unless otherwise specified in the articles, the authorised share capital is unlimited, as an unlimited number of shares may be issued. Furthermore, if the articles do not provide for several classes of shares, the company will be deemed to have only one class,
  • Filing the Articles of Incorporation When filing the Articles of Incorporation for the purpose of incorporation, the legal name of the corporation (corporate name) must be entered or a numerical designation (numbered company) must be requested in lieu of a corporate name. The corporate name of the company usually ends with "inc." or "ltd.", or other equivalents permitted by law. It is also possible to register, at the
  • Provincial or Federal Incorporation? When incorporating a company at corporation, the first thing to decide is whether to incorporate under the Quebec Business Corporations Act or the Canada Business Corporations Act. Depending on the situation of each business, it may be preferable to incorporate under one corporate statute rather than another. However, it is undeniable that corporations governed by Quebec law
  • Both provincially and federally incorporated corporations are required to maintain an issued and paid-up share capital account (federal stated capital account), which is subdivided by class of shares (and series of shares, if applicable). What is this account? This is a notional account, which represents the consideration received by the corporation for each class of shares. Where there are par value shares (at provincial
  • Corporate legislation, both provincial and federal, allows for various changes in the share capital of a corporation, including share exchange and conversion. These two changes in share capital should not be confused, although the result is often the same. The exchange of shares is a transaction specific to the individual shareholder, and constitutes simultaneously a sale of shares to the company and an issue of shares by the company. The shareholder enters into a share exchange agreement under
  • A major element that should not be overlooked in an incorporation is the restriction on the transfer of shares and other securities, which is usually included in the articles of incorporation. Generally speaking, a company issuing shares or other securities is obliged under the Securities Act to produce a prospectus, which is a complex document designed, among other things, to protect investors by
  • A corporate book generally contains several registers, some of which are required by law and some of which are not. Probably the most important register, and one that is mandatory under both Quebec and federal law, is the securities register. This register contains details of each issue and transfer of shares, the number and class of shares held by each shareholder, and the amount outstanding on the shares (for
  • Unlike Canadian law, the Quebec Business Corporations Act allows shares issued by the corporation to be uncertificated. This was an important change in 2009 when the law was adopted, compared to the old Companies Act. Where shares are issued in certificated form, a share certificate must be issued and delivered to the shareholder. The certificate contains, among other things, the name of the shareholder, the number and class
  • The shareholders' agreement is a very important document when several people (at least two) decide to join together and run a business through a corporation. The agreement will be, in a way, like a marriage contract. Several elements are usually included in the shareholders' agreement. This article focuses specifically on exit clauses. In the absence of an agreement, the shareholders of the company are only obliged to

 

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.

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The right to dividends

The right to a dividend is one of the three basic rights of shares provided for in corporate law, in addition to the right to vote and the right to
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The unanimous shareholders' agreement

The unanimous shareholder agreement allows shareholders, under corporate law, to restrict or withdraw, in whole or in part, the decision-making powers of
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Adding a shareholder: practical considerations

It is possible at any time to add one or more shareholders to an existing company. Here is an overview of some practical considerations
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Advantages of uncertificated shares

The Quebec business corporation regime, as well as other provincial regimes (including Ontario and British Columbia), expressly permits the issuance of uncertificated shares in its Act.
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Three types of company merger

A merger is the uniting of several joint stock companies into one, and requires articles of merger to do so. In order to carry out a
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corporation and General Partnership: differences

The corporation (inc.) and the general partnership (s.e.n.c.) both allow a business to be carried on by several people, either as shareholders or as a partnership.
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Introduction to share freezing

A unique feature of Canadian tax and corporate law is the use of the share freeze in a corporate reorganization by
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Family trust as shareholder

It is common in the structure of family businesses that the shareholder of the company is not the founder directly, but rather a family trust,
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Provincial or federal incorporation? Framework for analysis

In Canada, incorporation of a company can be done under either provincial (in this case Quebec law) or federal legislation. There are differences between these