Legal information

  • The formalities provided for by law must be respected when shares are issued, whether for an initial issue following the incorporation of the company or any other subsequent issue. These formalities are the same under both Quebec and federal law. It should be noted first that a share issue is a contract between the share subscriber and the corporation. The subscriber, by way of a subscription letter
  • The authorised share capital of a corporation may provide for several classes of shares. In this case, the articles of the corporation will provide, for each class of shares, rights and restrictions associated with the shares of these classes. The first class, often referred to as Class "A" of the share capital, is the class of shares known as "ordinary shares". Upon incorporation of a corporation and the issuance of the first
  • The LLC (Limited Liability Company) is a specific legal vehicle in the United States. The first state in the United States to enact legislation allowing the creation of an LLC was Wyoming in 1977. Since it is not incorporated, the LLC is to some extent similar to a sole proprietorship and a partnership. In addition, from a tax perspective, it is the owners of the LLC who are taxed at the personal level. However, as the corporation
  • When it comes to transferring shares, whether by sale, donation or otherwise, it is important to respect the rules set out in the law in order to have a valid transfer. For corporations incorporated under Quebec law, the rules surrounding transfers are set out in the Securities Transfer Act, while for federal corporations, the rules are set out directly in the Canada Business Corporations Act
  • The fact of holding the office ofdirector within a corporation implies its share of responsibility. In fact, both corporate and tax laws provide for various cases where directors incur personal liability for the company's obligations. For example, both the Business Corporations Act and the Canada Business Corporations Act provide that the directors of the corporation are jointly and severally liable to the employees
  • Transfers of shares, by sale, gift or otherwise, often occur between persons with family ties, particularly within family businesses. In such transactions, it is important to comply with the provisions of the tax laws (both federal and provincial) in order to avoid undesirable tax consequences. The Income Tax Act provides that a person who disposes of property to a person with whom
  • One of the major differences between the Canada Business Corporations Act (CBCA) and the Quebec Business Corporations Act (QBCA) is that the CBCA prohibits the issuance of shares that have not been fully paid for in cash, property or services. To this effect, section 25(3) of the CBCA states: "No shares may be issued until they have been fully paid for in cash or in property or services rendered of which
  • When the time comes to incorporate a business, it is necessary to decide under which law the company will be incorporated: the Quebec law (Business Corporations Act, hereinafter referred to as the "QBCA"), or the federal law (Canada Business Corporations Act, hereinafter referred to as the "CBCA"). Although the two incorporation acts are generally very similar, they each have their own particularities. Locations of the company's business and head office It
  • It is not always easy to find a business name, especially since the choice of name is restricted by various laws in Quebec. First, the name of corporation must end with "inc.", "ltée", or "s.a.", unless the name contains the words " corporation " or "compagnie". Then, you must ensure that you comply with the legislative requirements imposed by the


The information contained in the articles on the 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.

June 21, 2022

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,
July 4, 2022

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
July 7, 2022

The benefits of registering a trademark

What is a trademark? A trade-mark is a combination of letters, words, sounds or symbols that identify and distinguish a product or service.
July 12, 2022

Conditions for being director in a corporation

The board of directors plays a fundamental role in a corporation. Indeed, it has broad management powers as it is the main
November 3, 2022

Dissolution of a corporation by the Registrar

It is important to file the annual update required by law with the Enterprise Registrar (or Corporations Canada, for corporations).
November 5, 2022

How many shares to issue, and for what price?

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
November 10, 2022

What are the powers of the shareholders?

Corporations (incorporated businesses) are subject to important formalities, which make it important to distinguish between the decision-making powers of shareholders
November 12, 2022

When to incorporate your business?

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
November 18, 2022

NPO and corporation, what are the differences?

The formation of a federal not-for-profit organization is in many ways similar to the incorporation process of a corporation. Articles of Incorporation