Corporate Law - Incorporation of Companies
You are an entrepreneur and have been running your own business for a short time, you are drowning in tax and legal burdens and you do not know how to find help. You can consult a notary. The notary is the shadow business partner of every business in Quebec. The success of your business is directly related to the administration of your business. A well-managed business is a viable business and success is an inevitable consequence.
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There are several legal forms available to businesses wishing to establish themselves in Quebec: sole proprietorship, general partnership (S.E.N.C.), limited partnership (S.E.C.), joint venture or joint-stock company (company). The choice of legal regime governing your business has legal and tax consequences specific to each type of business.
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Sole Proprietorship
A sole proprietorship is operated by a single person who is often referred to as a self-employed person. Such a business has no legal existence separate from its owner and has no legal personality or separate assets and liabilities. When a natural person operates a sole proprietorship, he is often said to be "self-employed". Moreover, as the sole owner of the business, the individual receives all profits and suffers all losses, if any. The person operating under his own name is under no obligation to register with the Registraire des entreprises du Québec and when the income of this person is less than $30,000.00, he is not required to register for taxes (therefore, he is not required to collect taxes from his clients).
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General Partnership (S.E.N.C.)
A general partnership is a group of persons, called partners, who agree, in a spirit of cooperation, to carry on a common business. It is used by business partners for the purpose of operating a joint business. The partners contribute to the business by pooling assets, knowledge or activities and share the resulting pecuniary profits and losses among themselves. Such a company is created by means of a partnership agreement and must be designated under a name common to the partners. It has a name, an address, can sue and be sued and has independent assets. It must file a declaration of registration with the Registraire des entreprises du Québec.
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These may be, for example, offices of professionals (lawyers, notaries, dentists, etc.).
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Limited Partnership (S.E.C.)
A limited partnership consists of one or more general partners and one or more limited partners who are required to contribute to the common fund of the partnership. It is created by means of a partnership agreement and must be referred to under a name common to the partners. The general partners contribute mainly their work, experience and expertise. They are the only persons authorized to administer and represent the partnership and are the only persons responsible for administering the partnership. The limited partners do not assume any responsibility for the actions of the partnership. The limited partnership has a registered office, a name of its own and it can sue, i.e. it can sue and be sued.
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This type of company is mostly used in the sports and film industry.
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Joint Venture
This type of partnership has many disadvantages, especially with regard to the liability of the partners: all the partners are directly liable. It is a partnership that is not a legal person and has no legal personality, and whose partners act in their own name on behalf of all. It has no autonomous or separate assets, and it cannot institute legal proceedings (it cannot sue or be sued). The contract constituting the joint venture may be written or verbal or may result from facts which indicate the intention to associate.
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This type of company is often the result of a general or limited partnership that forgot to file for registration.
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Joint-stock Company (Company)
Also called a company or a legal person, it has a legal personality. As such, it has its own rights and obligations: a name, an address, the power to take legal action and, above all, a completely separate patrimony. A joint-stock company must be registered with the Registraire des entreprises du Québec and must file an annual tax return. It offers many advantages, including a low tax rate and a complete separation of the shareholder's assets from the company's assets.
Our firm offers a turnkey service to any entrepreneur who wishes to start a business. We will assist you in choosing the legal form of your company, in registering it with the government authorities, and we will guide you in fulfilling your legal obligations.
Our Services
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Minute book;
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Resolution to organize a company;
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Annual resolution;
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Shareholder agreement;
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Registration of the company with the Registraire des entreprises du Québec;
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Corporate registration with Corporation Canada;
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Obtaining the necessary registrations with government authorities;
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Obtaining the necessary licences to operate your business.
