Corporations

A corporation is constituted under a statute (such as the Companies Act or the Canada Business Corporations Act) and exists as a distinct legal entity from its shareholder or shareholders.

The goal of a corporation is to operate a business for profit and to distribute the profits among the shareholders.

The following are some of the characteristics of a corporation:

• A corporation exists on an ongoing basis, until such time as it is wound up. 
• A corporation can be set up under the authority of either a federal or a provincial statute. If you intend to operate your business solely in Québec, it might be advisable to incorporate under a provincial statute. However, the corporate name of a federally incorporated entity is protected throughout Canada.
• A corporation has exclusive ownership of all property (whether money or personal property) transferred to it by its shareholders in exchange for shares of the corporation.
• A shareholder's liability for the corporation's debts is limited to his or her investment, unless the shareholder provided personal guarantees for a loan to be invested in the corporation's business.

Liability of directors

If the corporation fails to remit an amount payable to the Ministère, the corporation and the directors serving at the time of the omission are jointly liable for the amount in question, as well as any penalties and interest.

However, directors are not liable if they acted with reasonable care, dispatch and skill under the circumstances, or if it was impossible for them to be aware of the omission. If you require further information, consult the folder Directors' Liabilities (IN-107-V).