Incorporating a company is a decisive step for any entrepreneur. It makes it possible to create a separate legal entity, structure governance, plan for growth, and limit certain liabilities. In Quebec, the two professionals best equipped to support clients in this process are the lawyer and the notary.
Although both are legal professionals authorized to incorporate a business in Quebec, their roles, methods, and added value differ. How should you choose? What are their respective roles? How can each help when incorporating a business?
The lawyer’s role in incorporation
The lawyer primarily acts as a strategic advisor. From the planning stage, they analyze the client’s objectives and needs, the various legal structures possible for the contemplated partnership, and, above all, potential legal risks. This analysis makes it possible to recommend an incorporation structure that is consistent with the business model and the client’s medium- and long-term ambitions.
A lawyer with litigation experience plays a key role in upstream planning. Their expertise enables them to anticipate problematic situations and to structure the business through contracts and agreements aimed at achieving the client’s objectives while minimizing risks.
Securing business contracts through non-compete and non-solicitation clauses, providing for share buyback or transfer mechanisms, provisions relating to estate freezes, or intellectual property, among other matters, is a particularly useful preventive approach when multiple shareholders are involved or when the business plans to bring in investors.
Unlike the notary, the lawyer pleads contested cases before the courts and is familiar with the judicial system, which necessarily requires them to keep their knowledge up to date. They can also anticipate the outcome of disputes within their area of expertise.
The role of the notary in incorporation
The notary mainly intervenes to authenticate instruments and ensure the formal compliance of corporate records, powers of attorney, and enforceability. Their work focuses on managing registrations and ensuring verifications in real estate or security contexts.
The notary also oversees share transfers and the traceability of securities.
When to retain a lawyer’s services
Retaining a lawyer is generally recommended when:
- the business has multiple founders, partners, or shareholders;
- a shareholders’ agreement must be negotiated and customized;
- external investors are participating in the project;
- the industry is regulated (technology, finance, health, franchising);
- ongoing legal support is desired.
In these situations, the incorporation advice provided by a lawyer helps reduce risks and ensure a scalable structure.
When to retain a notary’s services
Retaining a notary is generally recommended when:
- the business wishes to acquire real property or assets requiring registrations and authentic instruments;
- the transaction is standardized and formal rigor is paramount;
- setting up an impeccable corporate records book from day 1.
In these situations, a notary’s incorporation advice helps reduce risks and ensure a solid structure.
Respective strengths
Each professional, lawyer or notary, has strengths specific to their discipline and targeted knowledge based on their areas of expertise. These include:
- Lawyer: contractual customization, negotiation, and dispute prevention.
- Notary: evidentiary value of instruments, registrations, and formal security.
A hybrid approach—working with both a lawyer and a notary—may be useful for matters involving real estate, security interests, and complex shareholding structures.
Incorporation process: choice of jurisdiction and parameters
The entrepreneur must first choose the legal regime that will apply to the company. Incorporation may be carried out under provincial or federal law. This choice depends on the target market, name protection, language constraints, and regulatory requirements.
You must then determine:
- the corporate name;
- the authorized share capital and share classes;
- the applicable restrictions;
- the identity of the directors.
Incorporation process: formation and organization
Once the articles of incorporation are filed, the business obtains its enterprise number (NEQ) and applies for its tax identifiers. The organizational meeting then makes it possible to issue shares, adopt by-laws, and authorize banking operations.
The corporate records book (minute book or corporate records) is created, including the articles, resolutions, minutes, and internal registers. This document is essential for any future due diligence and maintaining it is a legal requirement.
Incorporation process: related agreements and compliance
From the time of incorporation, it will be necessary to ensure the drafting of complementary documents, including:
- the shareholders’ agreement;
- employment or service contracts;
- leases and key contracts.
Thereafter, proper planning and management of ongoing obligations (annual filings, corporate updates) are essential to maintain the company’s compliance.
Costs and coordination: cost items
Incorporation fees vary depending on the services offered and required. You should budget for government fees, professional fees (flat fee or hourly rate) related to preparing the corporate records book, and tax consultations as needed.
The complexity of the clauses and the customization of the documents directly influence the overall cost.
You should also budget for maintaining the corporate records book (minute book), for translations of the various documents, and any other tax consultations.
Teamwork between the professional and the accountant
Close collaboration between the chosen professional and the accountant makes it possible to align the legal structure and tax objectives: rollovers, dividends, investments, estate freezes.
This coordination also facilitates tax registration (GST/QST) and payroll setup.
It is essential to avoid generic documents and to maintain a compliant corporate records book. Directors’ responsibilities must be clearly understood and documented from the time of incorporation.
Incorporation is not a mere administrative formality. It conditions the entry of investors, the protection of intellectual property, credibility with partners, and the company’s ability to grow.
In an innovative start-up context, the strategic support and contractual customization offered by a lawyer often constitute a decisive lever.
Schedule a scoping session with our firm to secure your incorporation.
In summary
Provincial or federal incorporation: what are the impacts on the name and governance?
The federal incorporation process provides more comprehensive name protection than provincial incorporation in Quebec. Federally, filing the NuansMD report is mandatory; it generates lists of all Canadian corporate names and trademarks that are identical or similar to the proposed name. Provincially, it is up to the founder to carry out the necessary searches.
From a governance standpoint, the two regimes are comparable, but they include technical distinctions regarding directors’ residency, annual formalities, and certain default rules applicable to shareholders and directors.
Is a shareholders’ agreement essential for two co-founders?
Legally, entering into a shareholders’ agreement is not mandatory. However, any lawyer practicing, in particular, in commercial litigation will strongly advise shareholders—especially when they hold equal shares—to put such an agreement in place.
It makes it possible to govern decision-making mechanisms, restrictions on share transfers, buyback clauses, and dispute resolution mechanisms. In practice, it is an essential tool for dispute prevention.
How can share classes be adapted to tax and investment objectives?
The share capital structure must provide for distinct share classes to enable tax planning and the entry of investors. It is necessary to carefully calibrate financial rights (including dividend rights) as well as voting rights to meet the parties’ needs and objectives.
In what cases is a notarized instrument required at the incorporation stage?
Incorporation itself does not require a notarized instrument. However, a notarized instrument will be required, in particular, in the case of a contribution of real property to the company, a real estate mortgage, or certain agreements registered in the land register.
Which documents must appear in the corporate records book upon formation?
The corporate records book must contain the articles of incorporation, by-laws, directors’ and shareholders’ resolutions, the register of directors and officers, the securities register, as well as unanimous shareholders’ agreements, where applicable.
What is a realistic timeline for an incorporation that includes tailored agreements and initial contracts?
Incorporation and registration timelines depend on how applications are processed by the enterprise registrar. Under the best conditions, it may even be obtained within a few hours. However, when it includes a shareholders’ agreement and initial contracts (employment, services), a realistic timeline is generally around two weeks, depending on complexity and the parties’ responsiveness.
