SDN LEGAL INC.

Do you want to incorporate your business as a company but don't know where to start?

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We are here to help.

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You don’t need to read everything that follows: just call us at (514) 600-6025, and we will guide you through all the steps and prepare all the necessary documents. Our corporate lawyers can explain everything to you in very clear and easy terms. What might seem like a complicated process will turn out to be simple and quick. We can incorporate a company in as little as two business days (a provincial numbered company).

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Our business law lawyers can assist you with the following matters:

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• Choosing the legal form of your business (federal or provincial corporation);

• Choosing a name in English and French in compliance with the law;

• Filing the articles of incorporation with the Quebec Enterprise Registrar;

• Filing the initial declaration;

• Obtaining the certificate of incorporation;

• Obtaining the certificate of registration in the Quebec register of entreprises (for federal corporations);

• Obtaining the Quebec Business Number (NEQ);

• Drafting internal bylaws;

• Drafting resolutions in lieu of an organizational meeting of the board of directors and resolutions in lieu of a shareholders’ organizational meeting;

• Subscription letters;

• Necessary declarations under Regulation 45-106 respecting prospectus and registration exemptions, CQLR c V-1.1, r 21;

• Letters concerning the mandate of directors;

• Preparing registers of directors, officers, securities, and transfers;

• Obtaining GST, QST, and source deductions numbers, as well as corporate income tax registration;

• Drafting shareholder agreements.

 

Among the frequently asked questions is the following: federal or provincial incorporation - what regime to choose? How to choose between federal and provincial incorporation?

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Several factors need to be considered:

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• Startup Costs: Incorporating a provincial company involves filing the articles of incorporation with the Quebec Enterprise Registrar (Registraire des entreprises), and you only need to pay $378 for the incorporation certificate (2024 rate). If you choose federal incorporation, you must pay $200 to Corporations Canada and then $378 to the Quebec Enterprise Registrar. Conclusion: From a cost perspective, provincial incorporation is less expensive.
   

• Share Payments: A newly incorporated corporation must issue shares to its shareholders. A provincial corporation can issue shares even if they are not fully paid up. In contrast, for a federal corporation, all issued shares must be paid immediately. Conclusion: A Quebec corporation provides more flexibility in terms of funding your business.
   

• Foreign Participation in Management: The directors of a company are responsible for overseeing and managing the activities of a corporation. The Canada Business Corporations Act, RSC 1985, c C-44, requires that the board of directors include at least twenty-five percent Canadian residents. If the company has fewer than four directors, at least one or the sole director must be a Canadian resident. In contrast, the Quebec Business Corporations Act does not impose such a limitation. Conclusion: Incorporating a Quebec corporation may be preferable if non-residents are part of the board of directors.
   

• Name Protection: When incorporating a company, except for a numbered company, you must choose a name that is distinct from other businesses or registered trademarks in Canada. If you incorporate federally, the name check must be done across Canada. This means you need to ensure that no other company has the same name anywhere in Canada. In the case of provincial incorporation, there is a chance that two companies with identical or very similar names could be incorporated in different Canadian provinces (e.g., ABC Daycare Inc. in Quebec and also in New Brunswick). Conclusion: A federal corporation offers the best name protection.
   

• Right to Do Business Across Canada: Both federal and provincial corporations allow you to conduct business throughout Canada, including import and export activities and interprovincial or international transport. However, a Quebec-based company must have its head office located in Quebec. Additionally, it may be necessary to register extra-provincially in the province where you want to conduct your activities. Conclusion: If your main place of business is located in Quebec, either type of corporation will work well. However, if you want to establish the main office outside Quebec, or if one of the centers of your activities will be in another province, you should consider incorporating a federal corporation.
   

• Location of Board Meetings and Shareholders' Meetings: Both federal and provincial corporations can provide in their bylaws that meetings can be held both in Canada and abroad.
   

• Online Services: Online services are available for both federal and provincial corporations.