Principal Changes
Act respecting the legal publicity of enterprises (Bill 87)
Passed on May 19, 2010
In force as of February 14, 2011
All registrants, unless they are exempted by regulation of the Minister, must henceforth report new information to the Enterprise Registrar, including:
- The reference to the statute under which the enterprise was constituted, amalgamated, continued or otherwise transformed;
- The economic activity codes (EACs) corresponding to the enterprise’s two main activities and to the two main activities carried out in each of its establishments;
- A statement as to the existence of a unanimous shareholder agreement (USA) that restricts the powers of the directors or withdraws all powers from the directors;
- The names and domiciles of the shareholders or third persons having assumed the powers, if all powers have been withdrawn from the board of directors by a USA;
- The date of entry into office and, if applicable, the date of cessation of office of the directors or of those having assumed the powers under a USA; and
- The fact that they have become bankrupt within the meaning of the Bankruptcy and Insolvency Act, where that is the case.
Under the new statute, the Registrar must record the filing deadline for the annual update in the enterprise’s statement of information.
The new statute also grants the Registrar additional powers to ensure that the names declared by registrants are compliant. Thus, the Registrar may:
- Request that a registrant replace or change a name that is contrary to subparagraphs 1 to 6 of the first paragraph of section 17. If the registrant fails to comply with the request within the period prescribed by the Act, the Registrar may cancel the registrant’s registration or delete the name concerned, depending on whether the name is the registrant’s or another name declared by the registrant;
- Refuse to record in the register another name declared by the registrant, if the name is contrary to subparagraphs 1 to 6 of the first paragraph of section17, without compromising the deposit of the registrant’s statement. The Registrar will record in the register that the name has been refused and so inform the registrant.
The period for updating the information in the register will be increased from 15 to 30 days, unless a shorter period is prescribed by the Act.
The trustee of a legal person constituted in Quebec may file a cancellation declaration, but only if the bankrupt has been discharged by a court.
The conditions for revocation of a cancellation of registration are now explicitly provided for in the Act and are no longer left to the Registrar’s discretion. The following must also be filed with an application for revocation of a cancellation:
- The initial declaration and missing annual updating declarations;
- The prescribed fee;
- The annual registration fees prior to the application; and
- The prescribed late-filing penalty.
Partnerships must also report and update the names and domiciles of the three greatest contributors to the partnership among the special partners.
Business Corporations Act (Bill 63)
Passed on December 4, 2009
In force as of February 14, 2011
Constitution
It will no longer be made mandatory for the judicial district to be specified in the articles of constitution. If reference is made to the judicial district in the articles of an existing corporation, it will be deemed not written.
Henceforth, the time, in addition to the date, of constitution may be indicated in the articles.
Lastly, the research report on names that was required under Part IA of the Companies Act (CAQ) has been replaced by a declaration in the form of a box to be checked. Registrants must check the box to indicate that they have taken reasonable means to ensure that the name chosen is in compliance with the Act.
Amendment
Henceforth, there will be four ways to amend a corporation’s articles, namely, by:
- Amendment;
- Correction;
- Consolidation; and
- Cancellation.
An enterprise that wishes to make corrections to its articles so that they reflect its current situation must submit an amendment or correction request.
The amendment of articles is prospective in scope, while the correction of articles has a retroactive effect.
The consolidation of a corporation’s articles of constitution consists in depositing an updated version of the articles incorporating all amendments and corrections adopted since the drafting of the articles.
Lastly, corporations may request the cancellation of their articles, other than their articles of constitution if they were sent to the enterprise registrar by mistake.
Amalgamation
As was the case under Part IA of the CAQ, the Business Corporations Act (CA) provides for two types of amalgamation: long-form and short-form amalgamation.
However, section 283 of the new BCA clearly states that “an amalgamation of corporations requires the filing of articles of amalgamation”. This rule was implicit in the CAQ.
Henceforward, a corporation resulting from a short-form amalgamation may choose the name of one of the amalgamation corporations, whereas it used to be that the parent corporation had to keep its name.
Furthermore, as was the case under the CAQ, only corporations governed by the same statute, such as the BCA, may amalgamate. However, corporations governed by the BCA may amalgamate, through articles of arrangement, with corporations governed by the laws of a jurisdiction other than Quebec. This is known as an “inter-jurisdictional amalgamation”.
Continuance
From now on, there will be two types of continuance:
- Continuance under the Business Corporations Act (BCA);
- Continuance under the laws of a jurisdiction other than Quebec.
A legal person constituted under a jurisdiction other than Quebec may, if authorized by its governing act, be continued as a corporation under the Business Corporations Act.
Companies governed by Part IA of the Companies Act will automatically become business corporations governed by the new statute. They will not have to take any steps with the Enterprise Registrar to change their juridical situation.
In addition, companies governed by Part I of the Companies Act will have five years to be continued under the new BCA. If they do not meet the five-year deadline, they will automatically be dissolved.
Lastly, corporations governed by the new statute may be continued under the laws of a jurisdiction other than Quebec, if the jurisdiction so authorizes.
Dissolution
The provisions governing the dissolution of corporations will be much more complete under the BCA than under section 28 of the Companies Act. The BCA provides for four regimes under which corporations may be dissolved. More specifically, there will be three types of voluntary dissolution:
- By consent of the shareholders;
- By consent of the directors; and
- By the filing of a declaration of dissolution by the sole shareholder of the corporation.
The BCA also allows for forced judicial dissolution by court decision.
Liquidation
The legal regime of liquidation governed by the BCA is completely new. Inspiration for its provision was drawn to a large extent from those in the Winding-up Act. In fact, section 1 of the Winding-up Act has been amended to stipulate that the Act no longer applies to business corporations governed by the BCA.
In future, there will be two types of liquidation:
- Liquidation prior to the dissolution of a corporation, where the corporation has debts or obligations and shareholders;
- Liquidation under court supervision.
Revival
Business corporations dissolved under the BCA may be revived by the Enterprise Registrar, whereas beforehand, under the Act respecting the legal publicity of sole proprietorships, partnerships and legal persons, they could be revived only by revocation of their ex officio striking off and their administrative dissolution.
The Registrar may revive, as a corporation governed by the BCA, a corporation to which the Companies Act applied and which was dissolved or liquidated voluntarily or by the sole operation of law.
Under the BCA, corporations dissolved by a court decision may also be revived by a court, on request by and interested person.
Electronic transmission of documents
The Minister determines the form of the articles and other documents to be filed with the Enterprise Registrar, and the manner in which they are to be sent. Preference is given to the electronic format and electronic transmission.