[BUYING AND SELLING REAL ESTATE IN CANADA - QUÉBEC]
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Transactions and Reports Analysis Centre of Canada (FINTRAC - Canada's financial intelligence unit and anti-money laundering and anti-terrorist financing supervisor). The DCC may also exchange this information with any provincial or territorial government department or agency responsible for corporate law matters in that province or territory. Finally, the DCC is not required to keep or produce any information for more than 6 years after it was filed with the DCC. Unlimited Liability Company (“ULC”) ULCs, which are similar to American limited liability companies (LLCs), can currently be formed only under the laws of the Provinces of Nova Scotia, British Columbia, and Alberta; however, they can hold property in Québec if they register with the REQ. These entities permit flow-through treatment for profits and losses to their shareholders, although tax treaties may impact the ability to use this. However, Canadian ULCs do not provide limited liability protection, and it is therefore common practice to interpose a single purpose holding corporation between the ULC and its shareholder(s). Partnerships / Limited Partnerships These are formed under provincial/territorial law by the agreement of the partners in the case of a general partnership, or the general and limited partners in the case of a limited partnership. General partnerships do not usually require any other formality in order to be created, whereas a limited partnership generally exists only from its registration date. The partnership agreement or limited partnership agreement, as the case may be, takes the place of the certificate and articles of incorporation and by-laws, and will govern the issuance of partnership units and the operations of the entity.
Typically, in a limited partnership, the general partner (which is often a shell corporation) is responsible for all the obligations and liabilities of the limited partnership. The liability of the limited partners is restricted to the amount of their respective contributions, provided that they do not become involved in the management of the limited partnership. To retain limited liability protection, the limited partner must remain a passive investor rather than an active participant in the operation of the limited partnership. Both general and limited partnerships formed under Québec law or carrying on business in Québec must register with the REQ and provide information analogous to that required of a corporation. Trusts A trust carrying on a commercial enterprise, such as a business, investment, or real estate trust (whether or not profitable), which is not managed by a registered trustee (such as a trust company) must also register with REQ in the same manner as a sole proprietorship, partnership, or legal person (corporation) within 60 days of beginning operations. All trusts having tax years ending after December 31, 2023 must disclose the name, address, birth date (in the case of individuals), country of residence and social insurance or other tax identification number of all trustees, settlors, beneficiaries and controlling persons ( i.e. , persons having the ability, through the trust terms or a related agreement, to exert influence over trustee decisions regarding the appointment of income or capital of the trust).This includes trusts which own residential properties both within and outside Canada, and those which own shares of private companies that are not currently paying dividends (both of which were previously exempt from the trust filing requirements).
ILN Real Estate Group – Buying and Selling Real Estate Series
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