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 FRANÇAIS  

October 2012

New declaration for names at the Registraire des entreprises

A major change brought about by the new Quebec Business Corporations Act (RSQ, c S-31.1), hereinafter the BCA, when it took effect on February 14, 2011, concerned name searches. Sections 17 and 18 of the BCA brought on significant changes to sections 9.2 and 123.160 (5) of the old Quebec Companies Act. In short, the obligation to submit a name search report has been removed. Instead, applicants are required to check a box to confirm that they “have taken reasonable means to ensure that the name chosen is in compliance with the Act” when they file articles that include a corporate name. Since the arrival of the new Act, this box is already included in the Articles of Incorporation and binds the corporation to this declaration.

However, since July 21, 2012, the Registraire’s electronic service delivery (ESD) has undergone changes and this box has become a more official ”declaration regarding the name”. This declaration, attached to the Articles of Incorporation, must include, in block letters, the first and last names of the Incorporator or, if the latter is a corporation, the name of the person authorized to make this declaration. This Incorporator or authorized person must also sign the document. Articles of Amendment, Amalgamation or Continuance will require the signature of an authorized director of the corporation.

Accordingly, the signatory makes this declaration on behalf of all of the Incorporators and, as we understand it, becomes personally responsible for the corporation taking these reasonable measures to ensure the availability of a name and the consequences that may result from this action.

The impact of such a declaration and the constant risk of potential conflict with an existing name must not be viewed as trivial. There are many rules governing the use of names in Quebec and forgetting an existing name may lead to pitfalls. A name search and a comprehensive analysis of the results that addresses risks of potential conflict and takes into account the sections of the Act is still the best way of avoiding unpleasant surprises. CRAC not only has the expertise you need in this field, its comprehensive searches always include both a written report and verbal report during which you can openly discuss the issues.

Did you know… CRAC guarantees its name searches?

The CRAC team always has full confidence in the results it provides following its searches. In the unlikely event that a name is refused by Corporations Canada or the Registraire des entreprises du Québec following our favourable analysis, we will assist you in resolving the situation. If a new search should prove necessary, we will take care of it at no additional charge.

Tax harmonization comes to Québec: A brief overview

As you may already know, Québec is the latest province to get on board with the harmonization of its sales tax with the Federal level. This change is scheduled to take place on January 1, 2013.

QST will no longer be applied on GST, so in order to ensure that the harmonization has no impact on the province’s finances, the QST effective rate will be increased from 9.5% to 9.975%. The rate when combined with the 5% GST rate will result in an effective rate of 14.98%. Revenue Québec will continue to manage the GST and QST.

The effective rate of 9.975% will be calculated on goods and services payable as of January 1, 2013 excluding GST. It is important to mention that there are many provisions determining when payment becomes due, but in general, QST is calculated on supply when payment is made or when it is due, whichever comes first.

The harmonization will also have an impact on the clearance of goods at customs. Presently, under the GST system, imported goods are not taxed until they have cleared customs. However, under the QST system, the same goods are taxed before clearance. In order to merge the rules in both systems, QST will be subject to the same conditions as GST, so goods will be taxed after clearing customs. This change will be applied to all imported goods supplied after December 31, 2012.

Financial services that are currently exempt under the GST system, but are zero rated under the QST system, will now be exempt with the harmonization of the taxes. Therefore, financial services will no longer be entitled to a refund of tax paid on purchases. On January 1, 2013, suppliers of financial services who are registered for QST, but not GST, will have to cancel their registration as of the same date. CRAC can assist you with cancelling QST registrations. Contact Kelly Cardoso at 514-861-2799 / 1-800-361-5744 ext. 329 or check out our website (link) for more information on our TaxExpress services.

For further information we invite you to read the Information Bulletin at the following link:
http://www.finances.gouv.qc.ca/documents/bulletins/en/BULEN_2012-4-a-b.pdf

A new era for domain names: overview of recent developments in the arrival of new extensions (gTLD)

The acronym gTLD stands for generic Top Level Domain. Existing extensions include, for example: .com, .net, .org, .edu and .gov.

 

Despite the controversy surrounding the news, the Internet Corporation for Assigned Names and Numbers (ICANN) launched, early this year, a process to create new gTLDs.

The high costs associated with the process do not seem to have curbed applicants’ enthusiasm in the slightest. Aside from a few exceptions, there was a charge of approximately $185,000 for the review of an application for a new gTLD, in addition to maintenance and operation fees for the register of up to $200,000 per year once applications are accepted.

The period set for submitting an application for the creation and operation of a new gTLD saw close to 1,930 applications for new extensions filed, as revealed on June 13 of this year. This is quite significant, given that there are currently only 22! These applications included, for example: .attorney, .banque, .inc, .insurance, .finance, .law, .lawyer, .llc, .llp, .ltd, .mutuelle, .quebec and .web.

Since then, 7 application withdrawal requests have been filed and 57 requests for changes to existing applications have been received. Due to the much higher volume of applications than originally anticipated, ICANN recently extended the period reserved for the public to submit comments regarding a given gTLD. This period was originally set to end on August 12, 2012, but was extended by at least 45 additional days. The comments received will accordingly continue to be transmitted to the examination panel.

As of August 13, 342 applications had been reviewed and deemed satisfactory in terms of the financial, technical and operational criteria established. Evaluations are still taking place at a rate of around 300 applications per month and, according to the latest schedule released, should end sometime around July 2013.

Also, the period for third parties to object to a gTLD has been extended to January 12, 2013. Remember that basic objection fees can vary between $10,000 to around $27,000, depending on the selected Dispute Resolution Service Provider, the number of Experts on the panel and/or the number of applications objected to.

Barring any surprises, the first new gTLDs should be introduced early next year.

CRAC’s trade-marks team is always available to provide you with more information in this regard. Please contact Iana Alexova at 514-861-2856 / iana.alexova@dhltd.com

Are we moving towards a new Canada Business Corporations Act?

While the legal community in Quebec has just started figuring out the new Business Corporations Act (RSQ, c S-31.1), there are signs to suggest that the federal legislator could in turn consider the possibility of undertaking the process to establish a new law or amendments to the existing legislation.

Since the last reform of the Canada Business Corporations Act (RSC 1985, c C-44, hereinafter the CBCA) in 2001, several jurisdictions have updated their own legislation. This is true of Alberta, Ontario, British Columbia and, of course, Quebec. Within this new context, the Canadian legislation has become less competitive when it comes time to choose the jurisdiction in which to establish a corporation. Aspects that put the federal option at a disadvantage include a low degree of protection for minority shareholders, the requirement that at least 25% of directors be Canadian residents, the prohibition to issue unpaid shares and the fact that it is not possible to enter the time on a certificate.

While many question this option, there are signs indicating that Industry Canada is contemplating the idea of reviving its legislation to address the loss of competitiveness. In June 2010, a report from the Standing Committee on Industry, Science and Technology1 examined the CBCA and recommended broad public consultation on numerous potential amendments2. The Committee recommended holding consultations within the next two years.

In addition, you can view a web presentation dated April 2, 2009 by Mr. Richard Shaw, General Manager of Corporate Affairs at that time, raising the possibility of a future revision of the CBCA3. As well, as a registered intermediary with Corporations Canada, we were able to observe a growing willingness to make changes to the Canadian law so that it is more competitive

Finally, it is to be noted that the Audit and Evaluation Branch surveyed its clientele earlier this summer. The questions in this telephone survey focused particularly on what was appreciated and what was less appreciated in the current Canadian Law. Avoiding comment on the possibility of a reform or legislative amendments, Industry Canada mentioned that such audits are part of its governmental functions and cannot be considered as indications of legislative policy for Industry Canada.

We probably will not see a new CBCA or amendments anytime soon, since the legislator does not seem to have even begun the drafting process. However, we would not be surprised to see such a change in the near future, now that the new Canada Not-for-Profit Corporations Act (SC 2009, c 23) has taken effect.

1  Under section 136 of An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act and to amend other Acts in consequence (SC 2001, c 14), a House of Commons, Senate or joint committee should have examined the CBCA within five years of its passage in 2001 and, subsequently, conducted a review every ten years. It should be noted that the first review was postponed, which led to the June 2012 report.

2  Report from the Standing Committee, June 2010
    Site consulted on October 9, 2012.

3  Corporations Canada Presentation CRF 2009
   
Site consulted on October 9, 2012.

Flash memo

To use the title of “CPA” in a federal corporate name, you must get written consent from the Ordre des Comptables Professionnels Agréés du Québec. Without this consent, Corporations Canada will reject your application.

CPA is an official mark listed with the Canadian Intellectual Property Office.

A brand-new improvement to our black binders with slipcover

Ever mindful of offering superior-quality products, CRAC has improved its standard binder (1.5 inches) by integrating a double-lock mechanism.

To manually open the rings, you must first press on the two side levers to unlock the mechanism.

This makes the mechanism more durable and also helps pages stay in place in the rings when flipping through the pages of the book.

Do not hesitate to contact us to order one of these binders today or to find out more: 514-861-2799 / 1‑800-361-5744, ext. 345, or  expedition.crac@dhltd.com

CRAC: a springboard for its collaborators!

CRAC is proud to encourage its employees to grow professionally.

It is in this spirit that we gladly share some good news with you!

Melissa Noodelman, who had been working in the department of Corporate Inquiries for a little over a year, decided to go back to school to pursue notarial studies. Good luck, Melissa!

Johanna-Cynthia Bellamy is leaving the Corporate Services department to join the Corporate Inquiries team. She has been replacing Melissa since August 28. Congratulations, Johanna!

Laurence St-Aubin, who had been working from time to time in Corporate Services since 2011 and who oversaw the development of special projects, began her training at the École du Barreau in August. We wish you much success, Laurence!

Bianca Sallesse Somensari, an attorney who studied in Brazil and Portugal, first joined CRAC as a receptionist. She is now completing her training as a trade-marks technician with Iana Alexova. What a dynamite team!

With a Law Degree under his belt, Pierre Bilodeau, has been in our employe for nearly 5 years in charge of our special projects. This year he decided to pursue his own special project: complete the Bar in Québec City, home to where his studies began. He has been back with us since June and we will soon have a new lawyer at CRAC… Congratulations future maître!

CAP annual conference

This past June 15 was the Canadian Association of Paralegals’ (CAP) annual conference. The representatives of CRAC, who attended as exhibitor, were glad of the opportunity to say hello to some familiar faces and meet new people at our booth.

Congratulations to Patricia Savard (photo), who won our $100 gift certificate for the Spa Scandinave.

Bravo to CAP for the quality of the program at their conference and thank you to the organizers, who manage to make this event a ringing success year after year.


Denis Livernoche, Name Searches Manager at CRAC, and Patricia Savard, Paralegal at Joli-Cœur Lacasse

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