Copyright 2010, Blake, Cassels & Graydon LLP
Originally published in Blakes Bulletin on Business, November 2010
The Government of Quebec has officially announced that two important new laws, the Business Corporations Act and the Act respecting the legal publicity of enterprises, will come into force in Quebec on February 14, 2011.
To view the text of this announcement, click here.
This development will substantially change the legal landscape for business corporations established or doing business in the Province of Quebec.
All business corporations constituted under Part IA of the Companies Act will automatically and without any formality be continued under the Business Corporations Act upon its coming into force. Part I companies, of which there are around 3,000, will be given a period of five years – or two years for insurance, trust and savings companies – to effect their continuance under the new Act, and be automatically dissolved at the end of this period if they do not do so.
It will now be possible for Quebec business corporations to continue their existence under other jurisdictions, and for non-Quebec business corporations to continue their existence under the new Quebec Act.
Quebec is entering the "jurisdiction shopping" arena, with an ultra-modern statute.
Businesses and their legal advisors should be aware of this important development, and should consider the Business Corporations Act of Quebec as an attractive and competitive legal regime for incorporating or continuing their business corporations.
The new Act was designed not only to bring the Quebec legislation up to the level of the federal statute, the Canada Business Corporations Act, as modernized in 2001, but also to surpass that model whenever possible, based in several respects on original innovations or on more progressive provisions found in the statutes of provinces, such as Ontario, Alberta, British Columbia and New Brunswick, or in certain instances of Delaware and the American Model Business Corporations Act.
The table attached here outlines, in two columns, the additions that were made to the Companies Act regime to put it on par with the Canada Business Corporations Act (the "pluses"), as well as those that were made to surpass the federal legislation (the "super-pluses"). It can be seen that there are no less than 258 "pluses" and 115 "super-pluses" in the new Quebec Act.
Moreover, the coming into force of the Business Corporations Act will coincide with that of the new modernized Act respecting the legal publicity of enterprises, including the implementation of new rules facilitating the electronic transmission of documents to the enterprise registrar. Business corporations will be able to use efficient online services for the filing of their documents with the registrar.
For a brief, non-exhaustive list of possible reasons militating in favour of choosing the Quebec Business Corporations Act as the jurisdiction for incorporating or continuing a corporation, click here.
On February 14, 2011, all Quebec Part IA companies will be automatically continued under the Business Corporations Act. Such a choice does not have to wait until then to be made – for incorporations, it should be considered now.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
