What should I check in the RDPRM when buying business assets in Quebec?

Quebec records rights over movable property in the register of personal and movable real rights, the RDPRM, and the Civil Code says rights are published by registration in that register or in the land register, unless the law expressly permits another mode. The general approach to lien searches is covered in how to check for liens on business assets.

Search under every name the seller uses

The regulation says a search is done on a legal person using its name, and on a road vehicle referred to in its section 15 using its identification number. It also says that when a person acts under a business or other name and the application’s designation includes it, a name file is opened under that name too. A registrant declares any other name it uses in Québec under the Act respecting the legal publicity of enterprises, so the enterprise register is a place to find the names to search.

Read what each entry covers

For each entry, note the kind of right and the property it charges. A reservation of ownership over movable property acquired for the service or operation of an enterprise can be set up against third persons only if published, and the regulation adds that reservations of ownership, rights of redemption and rights under a lease of more than one year over certain road vehicles, caravans, mobile homes, boats, personal watercraft and aircraft also require publication. Under article 2944 a registration entails only a simple presumption that the right exists, so ask for the documents behind each entry.

Check end dates and what follows the assets

Under article 2981.2, an application to register a hypothec in this register must fix the date after which the registration ceases to have effect, so read each end date; under article 3059 the registrar may cancel, on its own initiative, the registration of a hypothec, or of a restriction or right, that has expired according to the register. Under article 2700, a movable hypothec on property not alienated in the ordinary course of business of an enterprise, and not registered in a file opened under the property’s description, is preserved by a notice registered within 15 days after the creditor is informed in writing of the transfer and the acquirer’s name, or consents to the transfer in writing. A hypothec registered against the seller is therefore not necessarily lost when the property is transferred to you.