Remuneration to be paid to the broker’s business corporation by the broker’s agency

Only a broker working for an agency may carry out his activities within a corporation. Consequently, brokers who work on their own account, and not for an agency, are not permitted to do so.

No. An agency remains free to decide whether or not brokers acting on its behalf will be allowed to carry out their activities within a corporation. The agency may impose its own conditions (e.g. in addition to the other requirements under the regulations, requiring that the broker’s company’s name include the agency’s name, or that the company’s activities be restricted to real estate brokerage).

Yes. If the agency allows brokers to carry out their activities within a corporation and this corporation complies with all the requirements contained in the regulations, any remuneration payable by the agency for brokerage transactions carried out by the broker will automatically be payable to the broker’s company.

• The broker must hold at least 90% of the corporation’s voting shares and be the company’s president (this status must be verifiable in the company’s statutes, shareholder agreements, the declaration of registration filed with the Registre des entreprises or any other company document);
• The broker must send an Application for authorization to practise within a business corporation to the Organisme d’autoréglementation du courtage immobilier du Québec, accompanied by the following documents:
  • A current statement of registration with the Registre des entreprises (CIDREQ) and, if the company is incorporated other than under the laws of Québec, written confirmation of the company’s existence from a competent authority;
  • If the broker is not the sole shareholder, the names of all company shareholders and, for each, the percentage of voting rights attached to the shares they hold;
• The agency must have signed a contract with the corporation, represented by the broker, by which the latter undertakes that the corporation provides the agency with the services of a broker to carry out real estate brokerage transactions;
• The broker must act on behalf of the agency exclusively through the company;
• The name of the company must contain the broker’s name as it appears on his licence.

No. A broker must have sole control of the company (at least 90% of the corporation’s voting shares) to be able to carry out his activities within a business corporation.

Yes, as long as the broker holds at least 90% of the corporation’s voting shares. If the broker is not the sole shareholder of the company within which he operates, he must provide the OACIQ and the agency on whose behalf he is acting with a current list of all the company’s shareholders and, for each, the percentage of voting right attached to the shares they hold. The other shareholders, even if they are qualified as real estate brokers, may not carry out brokerage activities within this company because they do not control at least 90% of the company as required under the Act.

When a broker notices that he no longer meets the conditions required under the Act or the regulations to operate within a corporation, he has 15 days to take action to correct the situation, failing which he shall cease to be authorized to carry out his activities within the corporation.

Yes. The business corporation engages in brokerage activities, but only through the broker carrying out his activities within this corporation and providing his services to the agency. Therefore any contract pertaining to a real estate brokerage transaction (brokerage contract) must be signed by the corporation, represented by the broker, for and on behalf of the agency for which he acts. To this effect, the broker must indicate, in the section of any brokerage contract used to identify the agency, that the agency is represented by the business corporation (after the broker’s name, select the statement “carrying out his activities within the business corporation”, and add the corporation’s name).

Likewise, in the section “Object of the contract” of the promise to purchase form, the broker should indicate that he operates within a business corporation by checking the appropriate box.

Operating within a business corporation does not involve any changes in the practices concerning signatures, whether the broker is signing as agency representative on a brokerage contract or as witness on a promise to purchase.

Yes. Subject to the rules under which the agency allows its brokers to carry out their activities within a corporation (the agency could require that the company’s activities be restricted to real estate brokerage and that it have no employee besides the broker), the company may have employees, but they cannot engage in real estate brokerage activities.

No. The Act specifically states that a broker may not invoke decisions or acts of the business corporation within which the broker carries on activities, or its status as a legal person, to justify a contravention of this Act or the regulations. The broker must also ensure that the corporation’s directors, executive officers and employees comply with the Act and the regulations.

No. Only the broker is licensed, and the business corporation is authorized to engage in brokerage acts through the broker only if the conditions contained in the Act and the regulations are met.

No. The Act states that the corporation will be insured by the Fonds d’assurance responsabilité du courtage immobilier (FARCIQ) under the broker’s insurance policy, without additional premiums. However, additional insurance should be taken out with a private insurer to cover the company’s other activities. Brokers will have to check with FARCIQ to find out the extent of their company’s coverage and, if applicable, its employees, directors and executive officers.

When a broker carries out his activities within a business corporation, any advertising and representation must be done through this corporation and include, in addition to the broker’s first and last names, type of licence held and name of the agency, the name of his corporation. The broker may omit his first and last names and the type of licence he holds if, following the name of the corporation, as applicable, he adds the words “business corporation owned by a real estate broker”.

• In its broker register, the agency must add a statement to the effect that the broker carries out his activities within a business corporation. Click here for a sample register;
• The agency must also keep, in a single record, for each of the corporations held by its brokers, the declaration of registration filed with the Registre des entreprises, and for a company incorporated other than under the laws of Québec, written confirmation of the company’s existence by a competent authority;
• In addition, if the broker is not the only shareholder of the business corporation, the agency should keep on file up-to-date information regarding the names of all company shareholders and, for each, the percentage of voting rights attached to the shares they hold;
• The file should also contain the contract signed between the corporation, represented by the broker, and the agency.

When a broker intends to carry out his activities within a business corporation, in addition to all other information and documents required by a licence application, the must provide the OACIQ with the following documents:

• an up-to-date statement registered with the Registre des entreprises (CIDREQ) and, if the company is incorporated in accordance with a law other than a law of Québec, written confirmation of the company’s existence from a competent authority;
• if the broker is not the sole shareholder, the names of all company shareholders and, for each, the percentage of voting rights attached to the shares they hold;
• the Application for authorization to practise within a business corporation form duly completed.

Upon request from the OACIQ, the broker must provide the following current documents in the manner and within the period indicated:

• The company’s statutes and by-laws and any documents annexed thereto in accordance with the Business Corporations Act or similar documents required in accordance with the company’s incorporating statute;
• The company’s securities register;
• Any shareholder agreement, voting agreement and related amendments;
• Any agreement on the granting of stock options with voting rights or any other right, even conditional, granted to a person regarding the issuance of such shares;
• The company’s initial declaration or declaration of registration, and any current declaration filed under the Act respecting the legal publicity of enterprises;
• The names and home addresses of the company’s senior officers.

If the broker wishes to find out what the tax advantages might be for him, he must validate his planned corporate structure with tax authorities. For this reason, we highly recommend that brokers seek assistance from a tax professional.

Like the corporate structure, the document that will be completed and exchanged between the broker’s company and the agency must be validated with tax authorities. There again, we highly recommend that brokers seek assistance from a tax professional.

It can be advantageous, notably from a tax standpoint. However, several factors must be taken into consideration to determine if this solution is appropriate in any given case. To find out more, we recommend that you read the following article written by a tax expert.

This document does not constitute an opinion on the pros and cons for a broker of carrying out his activities within a business corporation, or an assessment of the tax impact of doing so. To find out the tax implications, if any, of “transferring” your contracts currently in progress to a corporation, we highly recommend that you seek assistance from a tax professional.

When a broker acting on behalf of an agency starts carrying out his activities within a business corporation, any contract pertaining to a real estate brokerage transaction must be signed by this corporation, represented by the broker, for and on behalf of the agency for which the broker acts.

To meet this requirement and potentially benefit from the advantages of operating within a business corporation, a broker who starts carrying out his activities within a corporation and wishes to “transfer” his current contracts to his company should, with his agency’s permission, replace all brokerage contracts still in force which he signed as a broker acting on behalf of an agency with new contracts signed by the corporation (i.e. terminate current contracts and sign new contracts). This recommendation applies regardless of the current stage of each contract. Simply amending a brokerage contract using an Amendments form may not be sufficient.

However, nothing prevents a broker from continuing to carry out his current brokerage contracts without “transferring” them to his business corporation. Of course this means he will not benefit from the advantages of operating within a corporation when it comes to the revenue originating from these contracts.

This document does not constitute an opinion on the pros and cons for a broker who elects to operate within a business corporation of “transferring” his current brokerage contracts to this corporation or on the tax impact of this transfer. To find out the tax implications, if any, of “transferring” your current contracts to a company, we highly recommend that you seek assistance from a tax professional.

If he ceases to operate within a business corporation, the broker must inform the Organization in writing and pay the fees associated with this status change (see question 16 of the FAQ Certification - Brokers ).

In addition, the broker must amend the brokerage contract form to remove the name of the incorporation using the Amendments form.

Yes, as long as the activities are well divided and do not create confusion in the consumers’ minds.  In this regard, brokers must check with FARCIQ the extent of the coverage of the corporation and, where applicable, of its employees, directors, and executive officers. Brokers must also avoid placing themselves in a conflict of interest.

Yes.  However, this must not be for the purpose of doing indirectly what the broker cannot do directly.  Therefore, the broker must, in this case, make the disclosures required under section 18 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising and will not be entitled to compensation under section 23 of the same regulation in the case of a corporation controlled by the broker (see the following article in this regard).