Canada has two overlapping legal systems: federal and provincial. Some areas come under the exclusive jurisdiction of one level of government or the other, while responsibility for others is shared. This is the case with corporate law, among other things.

There are two options for incorporating a business here:

• incorporation under the Canada Business Corporations Act ; or
• incorporation under provincial legislation; e.g., the Québec Companies Act .

Canadian law is generally not very interventionist, notably in the area of corporate law. Economic stakeholders are given greater latitude to manoeuvre. For instance, there is no required minimum registered capital amount for incorporation and no minimum commercial lease term.

Incorporating a Business in Canada

The choice between a federal or provincial charter depends on the following criteria:

• Composition of the Board of Directors
  • Under the Canada Business Corporations Act (federal) at least 25% of the administrators must be residents of Canada (i.e., Canadian citizens or holders of permanent resident visas).T
  • There is no such requirement under the Companies Act (Québec).

• Geographic Extent of Planned Operations
  • Federally incorporated companies have the capacity and right to conduct operations throughout Canada, while remaining subject to generally applied provincial laws.
  • Provincially incorporated companies are entitled to conduct operations within their province of incorporation, and may extend them to provinces by submitting to the formal clearance procedures. Each province provides a method for entry in a register of foreign-held companies.

• Type of Operations
  • For example, responsibility for legislation in the aerospace sector is essentially federal. Federal incorporation may thus prove more appropriate for a company in this sector.

Organization for Incorporation of Québec Companies

Registraire des entreprises

The Registraire des entreprises du Québec (REQ) is the government organization empowered to deliver the services required for incorporation of companies under Québec law and ensure the dissemination of information about companies doing business in Québec.

Its mission is to help protect the public and enterprises in their commercial relations, and administer the public register of individual enterprises, businesses and corporations.