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 FRANÇAIS  

June 2012

The BCA: Retrospective and Review

Everyone remembers the tidal wave that hit Québec’s corporate community on February 14, 2011. It has already been one year since Québec’s Business Corporations Act (BCA) took effect, putting an end to the rule of Parts I and IA of the Companies Act, which last saw significant reform 30 years ago.

At the same time, the new Act Respecting the Legal Publicity of Enterprises came into force. This Act was subjected to a well-deserved modernization exercise, making it better suited to new technologies. The old CIDREQ system, well known by both the public and insiders alike, was finally put to rest and replaced by Electronic Service Delivery (ESD) with a much broader scope. In addition to the name search system, a legislative framework was established to govern the online transmission of documents that punctuate a company’s corporate life, from incorporation to dissolution and including updates, amalgamations and/or amendments of all kinds.

As could be expected following such an overhaul, this transition to the digital world was not without its ups and downs. Major delays in the processing of documents and various system hiccups arose after the Electronic Service Delivery (ESD) came online. As well, some services are still not available, such as requests for the cancellation of articles of incorporation, articles of arrangement, incorporations and dissolutions of non-profit corporations (Part III), applications for letters patent of amalgamation, etc. Consequently, the Registraire des entreprises du Québec has had to revise its initial position and resolve to maintain the paper version of forms for some requests. Employees of the Registraire des entreprises have been a great help, assisting professionals in their projects—both simple and complex—and resolving the occasional issue.

Transitional system

As a result of the transitional provisions of the Business Corporations Act, most companies — i.e., those governed by Part IA of the Companies Act — have become business corporations and are now governed by the BCA.

As for companies governed by Part I of the Companies Act, the BCA provides for a period of five years to continue under the new law. Beyond the continuance period stipulated in the BCA, these companies will automatically be dissolved, save for a few exceptions. Mining companies incorporated under the Mining Companies Act are subject to the same conditions.

Insurance companies incorporated under An Act respecting insurance and trusts incorporated under An Act respecting trust companies and savings companies to which Part I of the Companies Act applied get two years to continue. Section 715 of the BCA expressly stipulates that articles of continuance must be sent in before February 14, 2013. Otherwise, the new Act — save for a few provisions — is deemed to apply to these companies or corporations as of that date, with the necessary modifications and subject to the Act respecting insurance.

Institution of ClicSÉQUR express

After An Act Respecting the Legal Publicity of Enterprises took effect on February 14, 2011, every corporation registered in Québec was granted a personalized access code called ClicSÉQUR express. In combination with the company’s NEQ (Québec enterprise number) or QST (Québec sales tax) number, as the case may be, this code gives registered companies access to the Registraire des entreprises du Québec’s new web platform (ESD) and services currently available online on Revenu Québec’s portal. Organizations with the title of accredited intermediary can also access the records of corporations registered in Québec without this code as part of mandates entrusted by these corporations.

TOP 10 changes following the BCA’s enactment and ESD’s launch

Here is a TOP 10 list of changes and highlights, in no particular order, drawn up by CRAC’s team following the enactment of the BCA and the launch of the Electronic Service Delivery:

  1. It is now possible to indicate a time in articles in addition to the date.
     

  2. Annual declarations and amending declarations are now called current or annual “updating declarations.”
     

  3. It is no longer mandatory to indicate the judicial district in articles.
     

  4. The old general by-laws are now simply called “by-laws.”
     

  5. Share certificates for Québec corporations must be amended.
     

  6. Registered legal persons must declare whether or not a unanimous shareholder agreement to restrict or remove authority from the directors has been established.
     

  7. The presence of an exceptional voting right in certain situations. These situations accordingly lead to a class vote, which also includes shareholders who do not generally have voting rights.
     

  8. Continuances (charter import/export operations) are now possible under the BCA.
     

  9. The vertical amalgamation of several subsidiaries is now possible.
     

  10. It is now possible to issue shares without physical share certificates.

Conclusion

There is no need to point out that the past year has been full of twists and turns for Québec’s corporate community. The BCA, the Act Respecting the Legal Publicity of Enterprises and the ESD all celebrated their first anniversary. The coming year is looking up and other changes in the REQ’s online system are still to come or have already been done. Among other things, adjustments and improvements to the ESD will be made in spring and fall.

In fact, the Registraire des entreprises established a committee of experts from Québec’s corporate community with the mission to review, together with the REQ’s staff, all guides and forms offered online to improve the ESD, as well as all available paper documentation. Patric Besner of Besner, Avocats d'affaires, who updated CRAC’s corporate models in preparation for the change in legislation, sits on this expert committee. Me Besner also took part in Les développements récents en droit des affaires (2012) conference this past May 4, with a lecture titled “Revue de certaines décisions importantes en matière de conventions entre actionnaires”.

As we await these pending improvements, CRAC’s entire Corporate Services team remains available to help its clients make sense of and get through the multitude of changes generated by Québec’s Business Corporations Act.

NEW!
Incorporation of Real Estate and Mortgage Brokers

Since January 1st, 2012, real estate and mortgage brokers working for an agency can incorporate themselves to practise their trade as a business corporation.

The requirements for incorporating a business corporation are stipulated in section 34.1 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising, c C-73.2, r1 (Regulation respecting requirements).

Namely, brokers practising within a corporation must have at least 90% of the voting rights attached to this corporation’s shares. As well, they must be president of the corporation in question, in accordance with sections 34.1 (1) and (2) of the Regulation respecting requirements.

Another important point is that the corporation’s corporate name cannot be a number name. It must contain the broker’s name, as it appears on the licence issued by the OACIQ (Organisme d’autoréglementation du courtage immobilier du Québec), in accordance with section 34.1 (7) of the Regulation respecting requirements.

In this regard, brokers who want to incorporate a business corporation can make sure the name they want to give this corporation complies with the Regulation respecting requirements before they submit their request for incorporation by contacting our Name Searches department or the OACIQ Information Centre.

Government Fees by Province
A Hot Chart!

Incorporation fees, annual fees, extra-provincial registration fees

CRAC’s team has created a brand-new chart to help you make sense of the various government fees in effect in Canadian provinces. This chart is available on our website.

We also invite you to take a look at the “Requirements for Extra-Provincial Registrations in Canada” and “Directors’ Residency Requirements for Corporation for Each Canadian Jurisdiction” charts, also available on our website in the Corporate Services / Useful Information section.*

Our entire team is there to assist you in your projects outside Québec. To this end, please contact Denis Livernoche in the Name Searches department or Madeleine Cadieux from Corporate Services.

*We also want to direct your attention to a very interesting article titled “Où devrais-je m’incorporer ?” [Where should I incorporate my company?] written by Marie-Andrée Latreille, Corporate Law Attorney at Davies Ward Phillips & Vineberg, published in Développements récents en droit des affaires 2012, volume 350.

Welcome Back Madeleine / Good-bye Ludovic!

We are pleased to inform you that Madeleine Cadieux, Corporate Services Manager at CRAC is back. She left in December 2010 (promising to return!) to give birth to little Charlotte (photo).

 
Charlotte Dugal et Madeleine Cadieux

We want to take this opportunity to thank Me Ludovic Tremblay, who served as acting manager in Madeleine’s absence. It was a real pleasure to have him on our team!

Important Anniversaries in 2012

CRAC is a big family where camaraderie, respect and cooperation reign supreme. We look out for our employees to make sure that they are happy and stay a long time!!

Many people are celebrating their 5th anniversary with us this year:

Martine Gagné: after a stay in West Canada where she was working at our Vancouver office, it was a pleasure to welcome her to Montreal.

Nancy Bombardier: versatile and available for helping other departments, this is Nancy’s second time with us (almost ten years if you combine the two!)

Emily Serlis: always ready to do various tasks. Time flies when you’re in good company!

Christian Ménard: our accounting department is now in Toronto, but we couldn’t live without him!

Charline Downer: she ended up staying with us after her paralegal internship because once we got used to having her around, we didn't want to go without her!

Pierre Bilodeau: a future attorney. He has recently completed and passed the Bar in Québec. Congrats!!

Madeleine Allard: she’s thinking about retiring, but her three days/week schedule suits her just fine for now!

Some have been with us twice as long (10th anniversary):

Isabelle Boisvert: she’s our early bird! Always here, she’s the first one present at the office every morning. She takes care of name searches, more specifically at the federal level.

Joanna Jacobson: so much has happened in ten years! Now married with two little girls, Joanna is responsible for an important team that offers registration and research services. She’s on the job…

Kelly Cardoso: she shares her time between her two daughters and her new passion for fitness. Kelly is our paralegal assigned to helping our clients obtain tax numbers.

Longer still: 20 years!

Denis Livernoche: always laid back but with a passion for his work, he is the one that we call the “name guru”. Indeed, after all these years he has become a genius in his field. His vast expertise, put to work for our clients, is one of our most valuable assets!

Really, really long: 25 years!!

Anne Roy: she joined CRAC in May 1987, first with Corporate Services and then in Trade-marks. Thanks to a little charm (and much perseverance!), Thérèse Fredette finally convinced her to join the office’s administration by taking on the role of executive assistant. Her sixth sense for recruitment, her availability and her ability to listen attentively to the team have made her a cornerstone of the spirit of cooperation and friendship that prevails at CRAC, something that we believe comes through in our customer service. Congratulations Anne and thank you for your 25 years at CRAC!

Richard S. Gareau: above all, a kind-hearted man! Also an attorney with experience in so many respects. His skills in trade-marks combined with his infectious enthusiasm make him a highly appreciated conference speaker. As well, because of his ability to listen and adapt, he is the perfect person to carry out our special projects. Both professionally and personally, Richard is always there when you need him—and has been for 25 years… Thank you, Richard! Without you, CRAC would not be what it is today!!

CRAC Continues to go Green

We are pleased to inform you that our commitment to the environment continues!

In fact, our “Service Ledger” paper will progressively be replaced with paper made 50% from recycled fibers. Included in the paper that we are replacing are the pages in our corporate minute books.

Fabricated in Québec, the paper of remarkable whiteness is characterized by a consistent standard of quality and has excellent opacity.

By purchasing our products, you can be assured that you are participating to “greener” consumption!

Please note that we also offer a full range of legal paper.

Do not hesitate to contact our corporate accessories team for all questions regarding our products.

514 861-2799 extension 345 / expedition@crac.com

Thank you!

 
CRAC

1080 Beaver Hall Hill,
Suite 1717
Montreal (Québec) Canada
H2Z 1S8
Tel: (514) 861-2722
Toll free: 1-800-361-5744
Fax: (514) 861-2751
E-mail: crac@crac.com

Notice: The information contained in INFO-CRAC® is of a general informative nature and in no way constitutes nor should it be construed as a legal opinion. INFO-CRAC® is published for the benefit of our clients. Please submit any comments in writing to crac@crac.com