La constitution d’une société par actions

La constitution d’une société par actions

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Establishment of a corporation You have the intention to launch a business? You are in the business world, you are not incorporated and you wish to separate your personal assets from the assets and debts of your business? Why not constitute a corporation, the new term for what was called a company. Making business through a corporation will allow your enterprise to possess its own identity, as a moral entity and to have its own patrimony that will have assets and debts of yours. Because a corporation is a moral entity and possesses its own patrimony, the personal and financial responsibility of the directors and shareholders are fairly limited. A few exceptions are applicable, notably for the non-delivery of deductions, GST , QST or if there is fraud. As a founder and future director of a corporation, you must, for starters, chose between a corporation under provincial or federal jurisdiction. The choice of this jurisdiction will essentially be dictated by: The type of activity of the corporation, The service area and The particular requirements of corporative laws from each government level. After this, you will have to decide if you want a numerical society or a society with a social denomination. The choice of an official name must be verified before the constitution of the corporation so to make sure that the name isn’t currently used. For a provincial corporation, the social denomination must respect the criteria imposed by the Charter of the French Language. During the constitution of the corporation, it is essential to register the description of the authorised capital stock in the constitutive statuses. The capital stock is defined as the amount invested by the interested people, individuals or businesses, in return of an emission of shares from the corporation. Many types of shares can constitute the capital stock of a corporation, for example: Ordinary shares, shares of control, rollover shares, shares of investment or with discretionary dividends. Each type of action gives to each different shareholder some rights and restrictions within the corporation such as a right to vote, the right to receive the dividends, the right to participate at the sharing of the profits. Let us remember that it is essential to include in the constitution statuses, some clauses so that the corporation meets the closed transmitter criterias of the Securities Act. A corporation is subject to the imposition rate of corporation fixed by the fiscal authorities This last element will often dictate the decision to incorporate or not, because the tax savings can be consistent with a corporation. To that effect, it is suggested to consult a tax expert before the incorporation. In summary, just as an individual, the corporation, being a moral entity, possesses its own identy, its own home, its own patrimony and will have to be administered according with the appropriate corporative rules. We hope that these informations will be useful.

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