A corporation struck from the Québec register: how to revoke the cancellation

The short answer: yes, a corporation struck on the registrar’s own initiative can be brought back. The procedure is called revocation of the cancellation, it goes through the Québec enterprise registrar, and it requires putting right everything that caused the cancellation: overdue declarations, unpaid duties and accumulated penalties. Here is what to expect, concretely.

Why was your corporation struck?

In the vast majority of cases, for a mundane reason: the annual updating declarations were not filed two years running. The registrar then strikes the corporation on its own initiative. Many entrepreneurs find out by accident, when opening an account, signing a lease or selling: the corporation’s name appears in the register marked “struck”, and everything stops.

What are the consequences of being struck?

They are serious. A struck corporation loses its legal existence: it can no longer validly contract, sue or grant security. Its property can, in time, devolve to the State. And all the while the obligations keep running. A business operating through a struck corporation is sailing without a hull: every contract signed in that state is fragile.

How does revoking a cancellation work?

The logic is simple: repair, then apply. All the missing updating declarations must be filed, the unpaid annual duties and the penalties accumulated over the years must be paid, and then the revocation request is filed with its own fees. Once the request is processed, the corporation is deemed never to have ceased to exist, which retroactively secures what was done in the meantime. Corporate resolutions putting matters right round out the file and bring the corporation’s internal life back in order.

What does it cost, and how long does it take?

The total cost depends on how many years are outstanding: each missed year adds its duties and its penalties. That is why our service always begins by consulting your file and putting an exact figure on it, which you approve before we proceed. Those government amounts come on top of the service fee and are billed back to you at actual cost, with no mark-up. As for timing, allow the time to put the file right plus the registrar’s processing, generally a few weeks in total.

How long, really

It all depends on who is running the file, and the difference is considerable.

Someone handling it alone must first obtain access to the file, often without a clicSÉQUR code, file the missing declarations one by one, calculate the duties and penalties owed for each year, then file the revocation request and wait for it to be processed. Between the back-and-forth, the documents to be found and the corrections requested, you should generally allow several weeks, sometimes more if the file has several years outstanding.

As an accredited intermediary with the registrar, we reach your enterprise’s file directly, without your clicSÉQUR code. We see immediately which years are missing and the exact amount owed, we prepare all the declarations in one operation and we file the revocation request straight after. For an ordinary file we are often able to close the whole thing in 2 to 3 business days.

That difference is not cosmetic when a transaction is under way. A sale that has to close, a financing to be advanced, a lease to sign, a tender to file: in those situations the speed of putting things right is often worth far more than its cost. The government amounts stay the same whichever route you take; we put a figure on them and you approve them before we proceed.

What happened while it was struck

Revocation restores the corporation, but it does not excuse taking stock of the period that has passed. Several situations deserve an immediate check.

The contracts signed while it was struck first. They were entered into in the name of an entity that no longer had legal existence. The retroactive effect of the revocation is precisely meant to secure those acts, but prudence calls for listing them and, for those that really matter, having the other party confirm them in writing once the corporation is restored.

Insurance next. A policy taken out by a struck legal person can give the insurer an argument for refusing a claim. Report the regularization to your broker and ask for written confirmation that coverage is maintained for the period concerned.

Judicial remedies last, and this is the most insidious point. A struck corporation cannot validly bring an action to recover what it is owed. Prescription periods, however, keep running all the while. A significant claim can therefore become unrecoverable while you were unaware your corporation had been struck. If money is owed to you, that is the first thing to check, before even starting the revocation.

What becomes of the property

Being struck does not make the assets disappear overnight, but it sets in motion a mechanism that can, in time, lead to their devolution to the State. Real estate, equipment, bank accounts, intellectual property, everything the corporation owned sits in an unstable position until the situation is corrected.

The practical lesson is simple: the longer it lasts, the harder it is to put right and the greater the risk of loss. A corporation struck eight months ago is restored without much difficulty. A corporation struck eight years ago, holding a building, with directors who have died or cannot be found, is a file of an entirely different nature. If you discover a cancellation, the urgency is real even if nothing appears to be moving.

Revoke, or constitute a new corporation

The question is legitimate when the arrears pile up, and the calculation deserves to be done honestly on both sides.

A new corporation costs less than a revocation loaded with several years of duties and penalties. But it starts from zero, and that “zero” has content: a new business number, new tax registrations, new employer accounts, permits and licences to apply for again, no credit history, contracts to be assigned one by one with each counterparty’s consent. Leases, financing agreements and public contracts frequently contain clauses that make that assignment difficult, or impossible without renegotiation. And the name, if it has not already been taken, will have to be searched again anyway.

The rule of thumb from our practice: as soon as the corporation holds assets, carries current contracts, employs staff or holds sector permits, revocation is almost always the right decision, even if the initial bill is a surprise. A new constitution is called for only in the case of a shell with no activity, no property and no commitments. In that case, take care to close the old one properly by a dissolution rather than leaving it struck indefinitely.

After the revocation, making sure it does not happen again

Being struck is almost always an address problem, not bad faith. The registrar’s notices go to the head office on file, and if that has stayed at a former accountant’s office or at a home long since vacated, no one sees anything coming. Use the regularization to correct the head office address, check the list of directors on file and set an annual reminder for the updating declaration. Those three steps cost an hour and remove the underlying cause.

Frequently asked questions

Does my cancelled corporation still exist?

No: being struck on the registrar’s own initiative removes its legal existence in the register. It can no longer validly contract. Revoking the cancellation brings it back, with retroactive effect, as if it had never ceased to exist.

What does revoking a cancellation in Québec cost?

Our service is a flat fee, the registrar’s request fee included. Added to it are the unpaid annual duties and the penalties accumulated according to how many years are outstanding, billed back at actual cost. We put an exact figure on the total before proceeding and you approve it.

How long does reinstating a struck corporation take?

The time to file the missing declarations and settle the amounts owed, plus the registrar’s processing time: generally allow a few weeks for the whole process.

The current government amounts are set out in the cost of the revocation.