The incorporation of a business must follow a specific legal procedure. Any for-profit business wanting to become a corporation must be familiar with the different incorporation steps.
One of the crucial incorporation steps is the declaration of registration, or initial declaration.
Here is more information on the declaration of registration of a legal person.
Why file an initial declaration?
Every corporation that wishes to operate under Quebec law must file for initial declaration of a legal person.
This declaration provides legal entities with basic company information, specifically its field of activity, shareholders and directors. It is part of the steps to take for incorporating your company.
When should you file this declaration?
The declaration of registration must be done following the registration of the company’s constitution. If the declaration is done within 60 days of the constitution filing, it is free of charge. If this time limit is exceeded, the company will have to pay a late fine and may be subject to administrative penalties.
What constitutes a legal person?
There are three types of businesses in Quebec: sole proprietorships, partnerships and corporations. Section 2188 of the Civil Code of Québec states that the corporation is the only for-profit business that has legal person status.
The legal person has certain characteristics particular to this type of business. For example, section 298 of the Civil Code states that “legal persons are endowed with juridical personality.”
This type of business also benefits shareholders in multiple ways, such as with business risk protection. You may want to contact a tax and accounting service to find out the extent of these advantages.
Need help incorporating a business in Quebec?
The initial declaration of a legal person is therefore a key step in the incorporation of a business in Quebec. This declaration must be done to officially file the certificate of incorporation with the enterprise register.
With an expertise in SME taxation in Quebec, T2inc offers services to support the incorporation of your company. Contact us to learn more about our services.