Today we’ll discuss how a company incorporated under the Quebec Business Corporations Act can continue its existence under the Canadian Business Corporations Act through a process known as continuance.
WHAT IS BUSINESS CONTINUANCE?
Continuance is the process of changing your business’ legal structure without interfering with your business activities. Essentially, your business will “re-incorporate” into another jurisdiction and continue its existence under the laws of the new jurisdiction. In practice it will be as if your company had initially incorporated under this jurisdiction.
WHAT ARE THE TYPES OF CONTINUANCES?
Business continuance occurs when (1) a legal person changes its structure to become a corporation; (2) a corporation changes the jurisdiction under which it is governed. Today we’ll focus on the latter type of continuance.
HOW IS A CORPORATION CONTINUED?
There are both internal and external requirements for a corporation to undergo the continuance process.
First, the shareholders must pass a special resolution authorizing the directors or officers to proceed with the continuance.
Next, the corporation must obtain authorization from the Registraire des entreprises du Québec. This is done by:
Filing a form requesting the authorization;
Attaching a copy of the special resolution of the shareholders; and
Submitting a declaration signed by the officers attesting that the continuance will not be prejudicial to any shareholder.
This application is accompanied by the filing fee, which, as of 2022, is $237.00. If permission is granted, the corporation will be issued an authorization certificate allowing the company to proceed to the next step.
To continue under federal jurisdiction, certain documents must be filed with Corporations Canada. These include:
Filing the articles of continuance;
Including the form for the initial registered office address and for the first board of directors;
In certain situations, a NUANS name search report, particularly if the corporation is not more than 90 days old. This isn’t required for numbered corporations;
The Quebec enterprise registrar’s authorization certificate; and
The filing fee of $200.00 for Corporations Canada.
Once this process is completed and accepted, the Quebec enterprise registrar will issue a certificate of discontinuance, meaning that the Quebec business corporation’s act will cease to apply and the federal regime will be the new governing legislative authority. From this point forward, the company will be regulated by Corporations Canada but remain registered on the Quebec corporate registry and must meet its annual filing requirements.
This blog post is not legal advice and is for general informational purposes only. Always speak with a lawyer before acting on any of the information contained herein.