EN-M3 : Legal Issues Practice Exam

1. Which of the following are synonyms for “legal person”?

a) A company

b) A partnership

c) An incorporated company

d) A Consortium

e) A General partnership with limited responsibility

a, b, c
b, c, d
a and c
All of the above
None of the above

2. Which of the following abbreviations must be indicated at the end of the name of a legal person (company)? Example: Rénovation ABC …

a. Inc.

b. Cie

c. Ltée

d. SENC

e. SEC

a and b
a and c
a, b, c
d, e
None of the above
All of the above

3. The following abbreviation corresponds to which public organisation in Quebec: REQ?

Régie des entreprises du Québec
Registraire des entreprises du Québec
Regroupement des entrepreneurs québécois
Réseau des entreprises québécoises

4. True or false: When no changes, such as the address of its headquarters, its shareholders, or the members of its Board of Directors, occur within a company, the company never has to update its information with the REQ.

True, since the company will be able to wait for its next current update.
False, all companies registered with the REQ must update their information with the REQ every year.

5. How many consecutive updates with the REQ must a company fail to complete before the REQ can dissolve it in its own right?

2 consecutive monthly updates
2 consecutive yearly updates
3 consecutive yearly updates
None of the above

6. Identify the statement(s) that is(are) true:

a. The contractor holding an RBQ licence must notify the RBQ and the REQ within 30 days of changing the name of the company, or adding or removing a shareholder, administrator, or manager;

b. The same contractor must also notify the RBQ and the REQ within 30 days of changing the address of the headquarters of the company or the personal address of a shareholder, administrator or manager changes;

c. The contractor can update their information with the RBQ and the REQ with their respective online services;

d. The shareholder, the administrator, the manager or the guarantor of a company holding an RBQ licence has 30 days to notify the RBQ when he is found guilty of a criminal offense.

a and b
a and c
a, b, c
d
none of the above
all of the above

7. What does SENC mean?

General Partnership
Limited partnership
Non-Community company
None of the above

8. What does SEC means?

Société en nom commandité
Société en commandite (limited partnership)
Société des entreprises culturelles
Société environnementale de la construction
None of the above

9. Identify the statement(s) that is(are) true:

a. In Quebec, a construction company can be incorporated under two forms, meaning the LSA: Loi sur les sociétés par actions (provincial) and the LCSA: Loi canadienne sur les sociétés par actions (federal);

b. In Quebec, a construction contractor must be incorporated;

c. A general partnership (SENC) that is active in Quebec must be registered with the Registraire des entreprises du Québec;

d. A limited partnership (SEC) that is active in Quebec must register with the Registraire des entreprises du Québec;

a
b
a, b, c
b, c, d
a and c
a, c, d
all of the above
none of the above

10. In what type of company could the personal responsibility of the associates be implicated regarding the debts (obligations) incurred by the company?

a. Incorporated Limited company according to LSAQ (provincial)

b. Incorporated Limited company according to LCSA (federal)

c. International company

d. General partnership

e. Consortium

f. Limited partnership

a and b
b and d
c
d
e
f
All of the above
None of the above

11. What title is given to the individual at the head of a sole proprietorship?

Shareholder
Director
Owner
Administrator
Individual
None of the above

12. In a limited partnership, how do we call the person authorized to direct and manage the current activities of the company?

Shareholder
Director
Owner
Administrator
General partner
Sponsor

13. In a limited partnership, what title is given to the person liable, according to the company contract, to supply a contribution (investment) to the company funds?

Shareholder
Director
Owner
Sponsor
General partner
Speculative investor

14. In a corporation (company), what title is given to the person who invests in the company?

Shareholder
Director
Administrator
Owner
Sponsor
General partner

15. In a corporation (company), what title is given to the person who controls the company?

Shareholder
Director
Administrator

16. In a corporation (company), what title is given to the person who designate the administrators?

Shareholder
Top executive
Administrator

17. In a corporation (company), who designates the Officers (president, vice-president, treasurer, secretary)?

Shareholder
Top executive
Administrator (board of directors)

18. Who directs and controls the current activities in a general partnership?

The shareholders
The owners
The associates
The top executives
The administrators
The general partners

19. Among the following elements, which ones are generally included in a Shareholders Agreement?

a. The protection of minority shareholders regarding the decisions of the majority shareholders

b. The right to publish construction liens

c. The participation of shareholders in the administration of the company

d. Buyback mechanisms of shares between shareholders in case of conflicts

e. The activity sector of the company

f. Buyback mechanisms of shares between shareholders in case of bankruptcy, death, or the sentencing of a shareholder in a criminal offense.

a, b and c
a, c, d, f
b, c, e, f
All of the above

20. Which of the following is(are) legal person(s)?

a. Incorporated company

b. Company

c. Corporation

d. Self-employed worker

a, b and c
a and b
All of the above
None of the above

21. Which of the following entity(ies) is(are) distinct from its(their) shareholders?

a. Physical person

b. General partnership

c. Limited partnership

d. Jointly-owned company

e. Corporation

f. Company

a, b, c and d
c, d and e
e and f
All of the above

22. What title is given to the owners of a stock company?

Owners
Shareholders
Associates
Top executives
Board of directors

23. A company is a ____________ person?

Representing the assets of a third party
Physical
Legal
Creditworthy

24. How do we call a business that is not incorporated, registered with the Registraire des entreprises du Québec (REQ)?

Stock company
Individual company
Moral person
Company

25. Identify the statement that is true. When we specify that the owner of an individual company has unlimited personal responsibility, this means that …

If he doesn’t pay the debts of his business, he won’t be allowed to declare bankruptcy
If he doesn’t pay the debts of his business, he could be sent to jail
The creditors will be able to seize his personal assets if a sentence is rendered against his business
All of the above
None of the above

26. Which statement is true?

The employees of a company holding a limited licence can’t drive their vehicle on public jobsites
The limitation regarding public contracts is identified on the licence of a contractor by the Régie du bâtiment du Québec (RBQ)
The limitation regarding public contracts is identified on the licence of a contractor by the Commission de la Construction du Québec (CCQ)

27. For which of the following reasons would the RBQ impose a restriction on a contractor’s licence?

a. The company (joint stock company) or one of the Directors or Officers of the company has been found guilty, within the last 5 years, of a fiscal or bid-rigging offence, of drug possession for the purpose of trafficking, fraud, or money laundering, or of gangsterism;

b. According to the Regulation respecting restrictions to contractor licences for the purposes of obtaining a public contract, the business was found guilty of a certain number of infractions in the R-20 Act (Act applied by the CCQ);

c. The company (joint stock company) or one of the Directors or Officers of the company has been deemed to lack morality.

d. The company (joint stock company) or one of the Directors or Officers of the company has been found guilty to more than two infractions to the Consumer Protection Act

a
b
a, b, c
b, c, d
a and b

28. Identify the statement(s) that is(are) true:

a. A business that was found guilty of a fiscal offence will have a limited licence for the purposes of obtaining public contracts for 5 years from the date of the conviction;

b. The business with a limited licence won’t be allowed to bid on public contracts, execute public contracts, continue to work on public contracts, or act as a subcontractor in a public contract;

c. A general contractor executing public contracts won’t be allowed to hire subcontractors with a limited licence for the execution of a sub-public-contract.

a
b
c
a and b
a and c
All of the above
None of the above

29. In which database can a company verify if a contractor or a subcontractor is the holder of a limited licence for the purpose of obtaining a public contract?

Registraire des entreprises du Québec
Land registry
Register of personal and movable real rights
Register of authorized firms
Licence holders’ registry

30. According to article 65.4 of the Building Act, what name is given to a construction contract in which a governmental organisation is involved?

A lump sum contract
Over the counter forward contract
A governmental contract
A public contract
A private-public partnership

31. Which of the following establishments generally involve public contracts?

a. CÉGEP

b. University

c. Public High School or Comprehensive school

d. Hospital

e. Police station

f. Municipal swimming pool

g. Shopping mall

h. Bell Center

a, b, c, d, e, f
a, b, c, d, g, h
c, d, e, f, g
g, h
All of the above
None of the above

32. For which of the following reasons could a business have its licence request refused, or its licence suspended or revoked:

a. The business or one of its Directors is deemed lacking morality;

b. The business lacks a permit delivered by the Office de la protection du consommateur;

c. The business, one of its shareholders or one of its Directors was found guilty of a fiscal infraction or of a criminal offence related to their activities in the construction industry;

d. One of the Directors of the company was involved in a company that declared bankruptcy within the last three years;

e. The business is using the services of a strawman as a guarantor;

a, b and c
a, c, d and e
b, c, d and e
All of the above
None of the above

33. A client refuses to pay an amount of 63 000$ to his contractor.

Among the following choices, which legal recourse could the contractor use against the client?

a. The publication of a construction lien on the building on which he executed construction work;

b. A criminal prosecution for robbery

c. A civil prosecution with the Small Claim Court

d. A civil prosecution in the Quebec Court

e. A civil prosecution in the Federal Court

f. A civil prosecution in Superior Court

g. Sending summons

a, b, and c
a, d and e
a, d and g
All of the above
None of the above

34. If either a civil prosecution is presented to the Small Claims Court, the Quebec Court or the Superior Court, what is the name given the initial procedure filed with the Court?

Legal hypothec notice
Notice of exercise of an hypothecary right
Statement of claim (action on account)
Protocol implementation

35. What is the maximum delay (prescription) a contractor has to file a prosecution with the Court against a client, when the latter owes him an amount of money?

30 days from the end of the work
6 months from the end of the work
1 year from the due date of the payment
2 years from the due date of the payment
3 years from the due date of the payment

36. In which journal are published the laws adopted at the Legislative Assembly?

Le Devoir
La Presse
The Gazette
La Gazette officielle
Le journal des débats
The local newspaper where the law will be applied

37. What is the maximum amount for a lawsuit (action on account) that can be filed at Small Claims Court?

5 000$
7 000 $
10 000$
15 000$
20 000$

38. True or false: A company (legal person or a company) can always file a lawsuit at the Small Claims Court when the amount is 15 000 $ and less.

Select the best answer.

True, no matter the number of employees within the business
True, but only if it has 10 employees or less during the 12 months prior to the claim
False, a company can never file a claim at the Small Claims Court

39. What is the maximum amount for a lawsuit (action on account) that can be filed at the Court of Québec?

50 000$
59 999,99$
84 999,99$
100 000$

40. Put the steps of an action on account (statement of claim) in chronological order:

a. Initiating documents

b. Putting in default

c. Trial

d. Judgment

e. Protocol implementation

f. Seizure of property by bailiff

a, b, c, d, e, f
b, a, e, c, d, f
f, b, a, e, c, d
None of the above

41. What is the purpose of the Construction Legal Hypothec?

To protect the accounts receivable by the main stakeholders in the construction industry
To protect the clients from the construction contractors
To protect a loan granted by a bank for a construction project
All of the above
None of the above

42. What is the legislative text under which some stakeholders from the construction industry have a right to the legal hypothec?

The Building Act
The Consumer protection law
The Quebec civil code
The Code of Civil Procedure
The Criminal Code of Canada
The R-20 Act

43. We can describe the right to a construction legal hypothec as:

Unreal movable property right
Surreal movable property right
Real movable property right
Unreal immovable property right
Surreal immovable property right
Real immovable property right

44. From the list of stakeholders below, which can’t benefit from a legal hypothec?

1. The engineer

2. The architect

3. The technologist

4. The construction contractor

5. The construction subcontractor

6. The material supplier

7. The worker

8. The project manager

9. The lawyer

a, b, c, g, h, i
c, h
c, h, i
None of the above

45. Who can publish a legal construction hypothec for a construction contractor?

The contractor himself
The RBQ
A lawyer or notary
A representative union known by the CCQ

46. True or false: In order to benefit from the right to a legal hypothec, the stakeholder identified in article 2726 of the Quebec Civil Code must always denunciate his contract to the owner of the building.

True, otherwise he will automatically lose his right
True, but only in the residential sector
False, the employee never has to denunciate his work contract. As for the other stakeholders, denunciation is mandatory if they don’t have a contract directly with the owner of the building

47. Identify the statement that is true:

The denunciation of a contract must always be done by a lawyer
The denunciation of a contract can be done verbally to the owner of the building
The denunciation of a contract must be done in writing and be sent to the owner of the building before the work is begun or delivered

48. What is the maximum delay for the construction contractor to publish a construction legal hypothec (legal hypothec notice)?

120 days after work is begun
120 days after work ends
60 days after work ends
30 days after work begins
30 days after work ends
There is no maximum delay
None of the above

49. When a contractor wishes to recover an account receivable, how much time does he have to publish a notice of exercise?

3 months if he published a legal hypothec and 6 months if he didn’t publish one
6 months following the end of the work if a legal hypothec notice was published
6 months following the end of the work if a legal hypothec notice was not published
6 months if he published a legal hypothec and 3 months if he didn’t
None of the above

50. If a building on which a legal hypothec was published is sold, the sale:

Is no longer valid
Is reduced in half
The amount becomes payable by the notary who oversaw the sale
Is still valid as long as all other applicable regulations are respected

51. According to criteria established by the Court, how is the end of the work identified?

When all the work included in the contract is completed or when the work is ready for the use for which it was intended
When the owner decides that the work is completed
When the general contractor decides that the work is completed
When all the specialized contractors completed their work
When all the corrective works are completed
When the RBQ applies its seal on the building

52. Which type of right does the contractor who published a legal hypothec on a building have on this building?

A personal right
A right in rem (real right)
A servitude
All of the above
A legal hypothec doesn’t grant any rights to the contractor

53. True or false: a contractor that has not been paid can publish a legal hypothec on all of the buildings belonging to the owner, not only on the building on which he worked.

True
True, but only if all the buildings are financed by the same bank
False

54. True or false: A contractor who executes the work at the request of a tenant usually doesn’t have the right to a Construction Legal Hypothec.

True
False

55. Who must request the work in order for a legal hypothec to be lawfully published on the building concerned?

The general contractor
The architect
The engineer
The owner
The subcontractor

56. Who among the following stakeholders can’t publish a Construction Legal Hypothec on a building?

The architect
The supplier of construction materials
The worker
The owner
The general contractor

57. Among the following statements, which one is not required for the Construction Legal Hypothec published on a building to be valid?

The works must have been requested by the owner
The works must bring an added value to the building
The building must be seizable
The contractor who registers a legal hypothec must hold a valid RBQ licence when the work is executed
The owner must be an individual

58. True or false: A contractor can never publish a legal construction hypothec on a public building.

True
False, the legal hypothec is possible on certain public buildings. They are not possible on those that belong to the public domain (that are non-seizable)

59. Can a specialized contractor publish a legal hypothec on all the buildings on which he executed work?

Yes, provided that a work contract is signed directly with the owner
Yes, at all times
No, only on the building on which an amount of money remains unpaid
Yes, except for a residential building

60. Bonds are generally issued by … ?

An insurance company
The Régie du bâtiment du Québec
The Bureau des soumissions déposées du Québec (BSDQ)
The Commission de la construction du Québec (CCQ)

61. What is the purpose of the performance bond?

To guarantee the execution of the work by the workers
To guarantee the execution of the work comprised in the contract by the bidder (contractor)
To guarantee the signature of the execution contract
To guarantee the payment to material suppliers
It’s an insurance policy covering the civil responsibility of the contractor

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