LUIS MILLAN MONTREAL
Quebec’s legislative framework for companies incorporated in the province, for years
practically shunned by the business and legal community, has
been revamped, modernized
and simplified, drawing praise
alike from corporate and commercial lawyers and shareholder activists.
Replacing both Part I and
Part IA of the outdated and
much-maligned Companies Act
(Act), which was last updated
nearly three decades ago, the
Quebec Business Corporations
Act (BCA) has the ambitious
aim of making Quebec a national
leader in the business legal
landscape thanks to the introduction of measures that clarifies directors’ duties, simplifies
the process of incorporating in
the province, and grants new
rights to minority shareholders.
“It brings Quebec into the
21st century,” remarked Benja-
min Silver, counsel to McCarthy
Tétrault LLP’s business law
group in Montreal. “It’s got all
the pluses that modern corpor-
ate statutes like the Canada
Business Corporations Act
(CBCA), the Ontario Business
Corporations Act, and the new
British Columbia Business Cor-
porations Act but it has also
kept a few things and has a few
little twists that other statutes
don’t have that will make it
doubly attractive. It’s a good lit-
tle package altogether.”
As of Feb. 14, approximately
300,000 businesses, the major-
ity of whom are small- and
medium-sized enterprises
(SMEs), structured under Part
IA of the existing Act will auto-
matically be continued while
some 3,000 companies under
Part I will have five years—or
two years in the case of insur-
ance, trust and savings compan-
ies — to effect their continuance.
Boasting no less than 258
amendments that put it on an
equal footing with the CBCA
and 115 that go beyond the federal legislation, the in-depth
reform drew inspiration from a
plethora of sources, from the
CBCA to “more progressive provisions” in the statutes of provinces such as Alberta, British
Columbia, New Brunswick and
Ontario to the Delaware statute
and the U.S. Model Business
Corporations Act, said Paul
Martel, a special advisor with
Blake, Cassels & Graydon LLP
in Montreal who was retained
by the Quebec Minister of
Finance to help design and write
the new Act.
The current Act, described by
legal experts as too complicated,
too cumbersome and too rigid,
prompted many legal advisors
to opt for federal incorporation.
That may no longer be the case.
Shortcomings that have plagued
the current Act have been
stamped out, standard practices
that exist elsewhere in Canada
incorporated, and a regime har-
monized with the CBCA. At the
same time, the new Act pre-
serves advantages from the
existing statute while introdu-
cing attractive innovations.
“Quebec has been a big mar-
ket for the CBCA but that will
likely change because lawyers
will probably realize that there
is no reason to opt for the fed-
eral regime,” said Martel, who
has just completed writing a
book on the new Quebec Busi-
ness Corporations Act that will
be published shortly. “On the
contrary, companies already
incorporated under the federal
regime may now decide to incor-
porate in Quebec because of its
advantages. It doesn’t take
many. If tax specialists and com-
mercial and corporate lawyers
find even a couple of advan-
tages, that is often good reason
to justify the move.”
Legal and accounting practi-
tioners, who for years have com-
plained about the impossibility
of continuing a company incor-
porated under the Act, which
led to unnecessary hurdles in
corporate reorganizations, can
now heave a sigh of relief. Keep-
ing in line with the CBCA and
other provincial corporate legis-
lation, the new Act allows both
the continuance of a foreign cor-
poration under the laws of Que-
bec and the continuance of a
Quebec corporation under the
law of another jurisdic-
tion — something that Martel
believes will encourage some
See Quebec Page 24
Quicklaw®
Research Solutions
TO KNOW IS ESSENTIAL.
To Know More is powerful.
LexisNexis® Quicklaw® Essentials
;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;
LexisNexis® Quicklaw®;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;
;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;
;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;
;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;
;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;
FOR A FREE TRIAL call 1-800-255-5174 or visit www.lexisnexis.ca/freetrial
;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;
;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;
