You are self-employed, have a lot of success in business and want to take your business to the next level by incorporating your company? Good choice!
In this text, our business incorporation specialists explain how to incorporate your business in 5 steps. But first, let's refresh our memories and review what an incorporated business is
The incorporated company in brief
In Quebec, there are three legal forms of business for profit and the joint stock company is one of them. This form of operation is also known as an incorporated business or a company.
The incorporated company can be identified by the following elements: inc., incorporated, ltd, limited, corporation or SA, but it is mainly the following characteristics that make it different from other types of companies:
- It has a separate existence from that of its shareholders;
- She owns property in her own name;
- It has rights and responsibilities;
- It can sign contracts through its administrators;
- It can sue or be sued.
Some advantages of incorporating your business in Quebec
There are many advantages to incorporating your business. Here are a few that will undoubtedly comfort you in your decision to incorporate your business:
- A reduction in taxes payable to Revenu Québec ;
- Less financial responsibility for shareholders;
- The possibility of sharing the company's income;
- The possibility to accumulate income and use it later;
- No obligation to have a board of directors (provincial only);
- Simplified business financing;
- Continuity of existence.
5 steps to incorporating your business
1 - Deciding on the competence of your company before incorporation
In this first step of your business incorporation process, you must confirm the jurisdiction of your business. Are you going to incorporate federally or just provincially? The choice of jurisdiction determines how the company will operate and the rules that apply to it.
Each of these jurisdictions is governed by its own laws and specificities. For the purposes of this text, we will focus our incorporation efforts under the Quebec Business Corporations Act (QBCA). But you could also choose to create a federal company.
2 - Choosing the name of your incorporated business
Once you have determined the jurisdiction of your business, you must choose a name for it. At this stage of the process, many entrepreneurs leave it up to the Registraire des entreprises du Québec to assign them a numerical designation, which consists of a unique number, the word "Québec" and the abbreviation "inc".
Rather than a numbered company, other entrepreneurs prefer to give their company a real name. If this is what you are interested in, you should know that the name you wish to give your company must comply with the standards and rules of the Registrar. For example, you are not allowed to use a name used by another company operating in Quebec.
3 - Whether or not to request a name reservation from the Registrar
Do you feel that the name you have found for your company is exceptional and want to avoid someone stealing it? In that case, you can apply for a name reservation at the Registrar.
To do this, you can use the online service Submit a name reservation request.
However, you should know that this is optional.
4 - Production of various documents relating to incorporation
Now that your name is established, you are ready to produce the necessary documentation.
First, there are the articles of incorporation, which define the classes of shares in the company and the main rights attached to them.
There is also the initial declaration, which provides basic information about the company, such as its field of activity, the location of its registered office and the names of its shareholders and directors.
5 - Pay the fees, obtain the certificate and finalise the organisation
At this stage, you are well advanced in your incorporation process. But before you can claim victory, you must pay the Registrar the fees to cover the cost of receiving and processing the initial declaration.
If the authorities concerned certify that your application is correct and complete and that the required fees have been paid, they will issue a certificate of incorporation and date it.
Your company will be registered and assigned a Quebec Business Number (QBN). Afterwards, your articles of incorporation, the documents attached to them and the certificate of incorporation will be filed with the Enterprise Register. And that's it, your business is incorporated in Quebec!
Incorporating your business in Quebec and achieving success
That's it! Now you know how to incorporate your business in Quebec. We wish you the best of success in business.
You may need to call on a lawyer or a specific legal service, especially if the incorporated company has several shareholders. If this is the case, and you need additional support in this regard, we will be happy to help you.
https://t2inc.ca/fr/blog/incorporation-entreprise