Selling or buying through your company? Here’s what you need to provide to your real estate broker.

Are you a shareholder in a company that owns a building and you would like to sell it? Have you set up a joint-stock company with other members in order to acquire your first property, but you’re wondering what to do next?

- What documents should I provide to my real estate broker?

- Do all shareholders sign the forms?

When the buyer or seller is a company, certain specific aspects must be taken into account in the context of a real estate transaction. Who owns the building? Who are the directors of the company? Who is authorized to act and sign on behalf of the company? Here are several things your broker should know.

Who owns the building? 

When a building belongs to a legal entity, a corporation for example, whether or not there is only one shareholder in the company, and you would like to use the services of a real estate broker either for the sale or rental of your building and even for the purchase, the broker must verify who is legally authorized to do so.

As with any sale or rental contract, the real estate broker must always verify the identity of the owner of the building. One of the first steps is to check the title deeds. In addition to a visit to the Registre foncier du Québec website to examine the deed of sale, the mortgage deed and any other information relevant to the immovable property index, your broker will ask you for the original copies of the deed of sale and notarized documents proving that your company is indeed the owner of the building.

Who owns the business?

Now that the validity of the owner of the building has been established, the broker must also verify the identity of the directors of the company and verify the existence of the business. The broker will consult the Registraire des entreprises du Québec to confirm that your business is registered there and that it is in good standing with the tax authorities, i.e. that it has produced its annual tax returns. The broker will keep a copy on file of the return of information published in the enterprise register.

Your broker will also ask you for the certificate of incorporation (you will find it in the Minute Book of the business) and/or the most recent version of any other document that confirms its existence and contains its name and address as well as the names of its directors, such as a certificate attesting to the existence of the legal entity, the annual report signed by a firm of auditors, or a notice of assessment of the company sent by the government. Of course, the documents must be authentic, valid and up to date.

Who signs the contract and forms related to the transaction?

Very often, the company will appoint a person who is authorized to act and sign on its behalf: this is the “representative of the legal entity”. The broker must then verify their legal capacity in addition to obtaining a copy of the resolution of the company's board of directors authorizing the representative to act on their behalf. This document must be drawn up by a competent authority, such as a notary or a lawyer. The identity of the representative must also be verified.

What if I am the sole owner of my company?

Whether or not you are the sole owner of the business, a resolution of the board of directors is required. Remember that a company acts through its board of directors. The board has full management powers and the ability to make commitments to third parties on behalf of the company. Even if this board is made up of a single director, it is this person who must sign the resolution. Thus, it is not a “sole proprietor” who signs on behalf of the company as a shareholder, but a director appointed by the board of directors. This is an important nuance to understand. If you do not have such a document, a notary or a lawyer can help you with the process.

I am an individual and I am buying real estate owned by a company.

Even if you are accompanied by a buying broker, they will carry out the due diligence on the building you are considering in order to protect you. In particular, the broker will check who the owner is in the land register and, if it is a company, validate that the representative indicated on the property file is indeed a director of the company.

If you are planning to invest or sell soon, our team is ready to support you in your projects. Contact us at 514-388-9333 or write to us here.

By Celina Machado, Marketing Director and Residential Real Estate Broker, Martin Dumont Real Estate Team