Trust Operating a Commercial Enterprise
What is a trust operating a commercial enterprise?
A trust results from an act whereby a person, the settlor, transfers property from his patrimony to another patrimony constituted by him which he appropriates to a particular purpose and which a trustee undertakes, by his acceptance, to hold and administer (article 1260 of the Civil Code of Québec).
A trust operating a commercial enterprise is a trust that carries on an organized economic activity that consists of producing, administering or alienating property, or providing a service in order to make a profit. The following trusts are deemed to be trusts operating a commercial enterprise:
- business trusts (such as trusts in the commercial, financial, industrial or professional sector);
- investment trusts (such as mutual fund trusts or royalty trusts whose investors acquire units in a natural resource enterprise);
- real estate investment trusts.
As a rule, the following trusts are not deemed to be trusts operating a commercial enterprise:
- private trusts constituted for the sole purpose of procuring a benefit to specified persons, such as:
- pension trusts,
- partner buy-sell trusts,
- stock purchase trusts,
- security trusts,
- stock escrow trusts,
- voting trusts created under an agreement or a testament (such trusts usually represent an investment or asset protection vehicle rather than a commercial activity);
- testamentary trusts;
- social trusts.
- Note
- Contact our client services to obtain document IN-525, Obligation d'immatriculation concernant les fiducies exploitant une entreprise à caractère commercial (which is available in French only). The document will be mailed to you.
How to register a trust operating a commercial enterprise
The Act respecting the legal publicity of enterprises was amended by Bill 128, An Act to enact the Money-Services Businesses Act and to amend various legislative provisions. Consequently, where a trust operating a commercial enterprise is not administered by a registered trustee, it will be required to register for the enterprise register within 60 days after July 1, 2014, or, where it begins its activities in Québec after that date, within sixty days of beginning its activities.
To register such a trust, you must file the fillable (dynamic) PDF version of form RE-204, Déclaration d’immatriculation pour une fiducie exploitant une entreprise à caractère commercial (see English courtesy translation RE-204-T).
Once such a trust is registered, it must file its annual or current updating declarations using the fillable (dynamic) PDF version of form RE-403, Déclaration de mise à jour annuelle ou courante pour une fiducie exploitant une entreprise à caractère commercial (see English courtesy translation RE-403-T).
Transitional measures for trusts registered before July 1, 2014
Annual or current updating declaration
Trusts operating a commercial enterprise that registered with the Registraire des entreprises before July 1, 2014, and are not administered by a registered trustee must file form RE-403 within 30 days after July 1, 2014, or, where their activities in Québec begin after that date, within 30 days of beginning their activities, in order to specify their legal form and to add the following information:
- the act governing the trust specified in the constituting instrument;
- the purpose of the trust;
- the name of the administrator(s) of property of others acting as trustee(s) (if the name(s) have not been previously given).
Trusts operating a commercial enterprise that are already registered and have declared administrators or officers who are not members of the board of directors must first file form RE-401, Déclaration de mise à jour annuelle ou courante pour une personne physique exploitant une entreprise individuelle ou pour une société de personnes, une association ou un groupement de personnes (see English courtesy translation RE-401-T) to remove this information because such trusts are administered by trustees.
Trusts operating a commercial enterprise must contact our client services to obtain a copy of form RE-401, since they cannot use our Produire une déclaration de mise à jour annuelle and Produire une déclaration de mise à jour courante online services to file updating declarations. Contact information is provided on the Contact Us page.
Transitional measures for trusts whose registration has been cancelled
Filing a declaration of reregistration
Trusts operating a commercial enterprise must file form RE-204, Déclaration de réimmatriculation (see English courtesy translation RE-204-T), with the Registraire des entreprises if:
- their registration was cancelled before July 1, 2014;
- they are not administered by a registered trustee.
Such trusts must file form RE-204 within 60 days of July 1, 2014, or, where their activities in Québec begin after that date, within 60 days of beginning their activities. The Québec enterprise number (NEQ) that was assigned to them must be entered in the box of the form provided for that purpose.
- Important
Trusts operating a commercial enterprise cannot use the online services of the Registraire des entreprises. They must use the fillable (dynamic) PDF forms available in the Formulaires section. If a form is not on our website, contact us to obtain a copy of the form. Our contact information is provided on the Contact Us page.
Fees and terms of payment
The fees applicable to trusts operating a commercial enterprise are the same as those that apply to for-profit legal persons. The fees are given in chart RE-101, Tarifs et modalités de paiement (see English courtesy translation RE-101-T).
Legal obligations of trusts operating a commercial enterprise
Once the trust is registered, it will have legal obligations to fulfill each year. For more information, click Legal Obligations Stemming from Registration.
Client services
Client services of the Registraire des entreprises are provided by Services Québec at its offices in Montréal or in Québec, as well as by email and by telephone. Contact information is provided on the Contact Us page.
Client services staff can help you understand, in particular, the procedures that apply to trusts operating a commercial enterprise and the application of the rules of law in general. However, they cannot interpret the rules to adapt them to a specific case or respond to a specific situation. For such help, consult a legal adviser.