How is made the issue of shares of a business corporation? | ScriptaLegal
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Frequently asked questions > Company > Business Corporation > How is made the issue of shares of a business corporation?

How is made the issue of shares of a business corporation?

Both in Canada and in Quebec, the process of issuance of shares by the business corporation begins generally by the sending to the board of directors of a notice of subscription by the person who wants to acquire shares. This notice indicates the desired number of shares and the price per share. Thereafter, the board of directors must accept the subscription, inform the subscriber about it and proceed to the issuance of shares by means of a resolution.

In Quebec, the shares can be issued without having been fully paid, unlike the federal jurisdiction where it is forbidden to do so.

The provisions of the Quebec Securities Act will also have to be analyzed if the business corporation has its head office (called the registered office in the federal jurisdiction) situated in the province of Quebec and the shareholder agreement, where necessary, respected. National Instrument 45-106 regarding prospectus and registration exemptions, adopted by the Canadian Securities Administrators, will also have to be analyzed since it applies to a business corporation of federal jurisdiction.

One or more share certificates will be prepared in the name of the new shareholder, entries in the registers of the minute book will have to be made as well as, in some cases, a notice to the Québec enterprise registrar. In Quebec, the shares can be issued without the delivery of share certificates; as replacement, a notice of holding of shares is then delivered to the shareholder.

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