How to incorporate a business in Quebec: A practical guide for business owners

Are you self-employed, experiencing success in your business activities, and considering taking the next step by incorporating your company in Quebec? Incorporating a business in Canada provides a robust structure, tax advantages, and the ability to operate with confidence, whether in Quebec or across Canada.
At T2inc.ca, we specialize in corporate taxation and work with experienced lawyers to offer turnkey services to register or incorporate your business. Below, we walk you through the 7 steps of the incorporation process while explaining the benefits of choosing the right business structure for your needs.
What is incorporation?
Incorporation is the process by which a business becomes a separate legal entity, also known as a limited liability company, with its own legal rights and responsibilities. Once incorporated, your business is distinct from its owners (the shareholders), allowing it to exist indefinitely regardless of changes in ownership.
By choosing to incorporate your business in Quebec, you provide it with a business structure that enhances credibility, limits personal liability, and supports long-term growth
What are the benefits of incorporating?
Incorporating your business offers several important advantages:
- Limited personal liability: Protect your personal assets from business debts and obligations.
- Enhanced credibility: A corporation will increase the confidence of your customers, partners and investors.
- Tax advantages: Take advantage of reduced corporate tax rates and tax planning opportunities
To learn more about the benefits of incorporating in Quebec, read our full article on why you should consider this business structure for your incorporated business.
How to incorporate a business in Quebec step by step
The process of incorporation in Quebec is straightforward when you follow these steps. Below is a concise guide to setting up a corporation in Canada while remaining compliant with local laws.
Step 1 : Choose to incorporate at the provincial or federal level
The first step in the incorporation process is deciding between provincial incorporation or federal incorporation. Your decision depends on where you plan to operate your business and the protection your business name requires.
Operating only in Quebec? Provincial incorporation is simple, affordable, and suited to businesses focused on the local market. Expanding across Canada? Federal incorporation offers broader name protection and operational flexibility.
Here's how to decide:
Provincial incorporation:
For small businesses or companies planning to operate primarily in Quebec, provincial incorporation is often the simplest and most cost-effective option.
Benefits include:
- A simpler, faster process: administrative steps are reduced compared to federal incorporation.
- Lower costs: registration fees are lower, making it a suitable solution for small businesses.
- Local compliance: tax and legal obligations are directly aligned with Quebec’s business laws, making them easier to manage.
However, if you wish to expand into other provinces, you will need to obtain extra-provincial registration in each jurisdiction in which you operate. This may involve additional fees and paperwork.
Federal Incorporation:
If you plan to operate in multiple provinces or conduct business across Canada, federal incorporation offers key advantages:
- National name protection: Unlike a provincial incorporation, your business name will be protected in all Canadian provinces and territories.
- Geographic flexibility: you can operate your business anywhere in the country, regardless of your business is located in Quebec.
- National credibility: a federal incorporation can enhance your reputation when you work with customers or partners beyond the borders of Quebec.
Keep in mind that federal corporations must also register with the Quebec Business Registrar, which can add administrative steps and costs.
Step 2: Choose a name for your business
Your business name is essential. It represents your company’s identity and impacts how customers and partners perceive it. In Quebec, you can choose between a numbered company or a customized business name. Your choice depends on your specific business needs and priorities.
Numbered name:
A numbered company is a quick and inexpensive way to incorporate your business. If your business is a holding company or if the name is not critical to your operations (as in the case of in-house services), this option may be sufficient.
Your company will be identified by a unique number followed by the words "inc." or "Canada inc.". For example, your company could be called "12345678 Québec Inc."
Customized name:
If you want to develop a strong, visible brand, a custom name is essential. This name can reflect your activities, attract your customers and strengthen your credibility.
Here are the key steps to choosing your custom name and benefiting from enhanced protection in your jurisdiction (Quebec or Canada):
- Check availability: use the Registraire des entreprises du Québec (REQ) or Corporations Canada search tools to ensure the name is unique.
- Reserve your business name: once verified, you must apply for a name reservation with the Registre des entreprises du Québec (REQ) or Corporations Canada.
- Legal compliance: the name must include a legal descriptor (e.g. "inc.") and comply with Quebec language requirements (French is mandatory).
Step 3: Prepare the necessary documents and confirm the legal status of the company
Incorporating a corporation requires the submission of specific documents to formalize the company's legal status and organizational structure. These documents lay the foundation for the company's ability to legally operate a business.
Here are the required documents:
- Articles of Incorporation: This basic document establishes the operating rules of your company. In particular, it specifies:
- The incorporated business name (numbered or customized).
- The share structure and the rights of the shareholders.
- The roles and responsibilities of the board of directors.
- An initial declaration: this document indicates
- The official address of your company's head office in Quebec.
- A complete list of directors, including their names and contact information.
Before submitting these documents, it is crucial to ensure they are complete and accurate. Once the Articles of Incorporation are published in the official registry, making changes becomes challenging and costly, often requiring legal proceedings. Specifically, verify:
- The correctness of all company and director information.
- That the business name has been validated and reserved if applicable.
Professional Advice: If you’re uncertain about any aspect, consider consulting a business attorney or other professionals. They can help you prepare all required company formation documents, avoid mistakes, and ensure your business is properly incorporated.
Step 4: Register the business with the Registraire des entreprises du Québec (REQ) to obtain a Quebec Business Number (NEQ)
Registering your business with the Registraire des entreprises du Québec (REQ) is an essential step in formalizing your business. It allows you to publish your articles of incorporation, thus confirming the official existence of your company in Quebec. This action allows you to obtain a Numéro d'entreprise du Québec (NEQ), which identifies your company to government institutions.
To register your company, you must
- Submit your documents online: Use the REQ portal to submit the Articles of Incorporation, initial declaration, and other necessary files. The process is fully digital and efficient.
- Obtain your NEQ: After completing the registration, the REQ assigns a Quebec Business Number (NEQ), a unique identifier required to operate your business within the province.
Whether your business is incorporated federally or provincially, obtaining an NEQ is essential for compliance and business formation in Quebec.
Step 5: Open a business bank account and, if necessary, register for taxes
With your NEQ in hand, the next step involves setting up a business bank account and, if applicable, registering for the GST and QST. These actions are critical for managing your company’s financial and tax obligations.
A business bank account is essential for separating your personal finances from those of your business. It allows you to:
- Manage your business transactions in a clear and organized manner.
- Enhance your company's credibility with partners, suppliers, and customers.
- Maintain clear accounting and tax records for business activities.
If your business expects to generate annual sales in excess of $30,000, you must register for the Goods and Services Tax (GST) and the Quebec Sales Tax (QST). This registration is mandatory in order to:
- Charge applicable taxes to customers.
- Recover taxes paid on business expenses
- Ensure your business stays compliant with federal and provincial tax laws.
Note that even if your business earns less than $30,000 annually may still register for taxes voluntarily, which can be beneficial depending on your type of business. Seek advice from a tax professional to determine the best approach.
Step 6: Pay the fees and complete the organization to receive your certificate of incorporation
The final step in the process of incorporation involves paying the required fees and completing the company’s internal setup to obtain your Certificate of Incorporation. This official document confirms the legal existence of your company, allowing it to incorporate and operate fully.
Before you receive your Certificate of Incorporation, it's important to structure the internal elements of your company. This includes:
- Creating bylaws: This document establishes your company's operating rules, including the role of directors and decision-making processes.
- Issuing the first shares: determine the number of shares to be issued and allocate them to shareholders.
- Hold a directors' meeting: The first meeting is used to adopt the bylaws and appoint the company's officers.
These steps ensure your incorporated business operates smoothly and meets all compliance requirements from the outset.
Once these are completed, you’ll receive your Certificate of Incorporation, formally allowing you to conduct business in Quebec and beyond.
Incorporation FAQ
Can I incorporate myself or do I need a lawyer?
Yes, you can incorporate a business online through the REQ or Corporations Canada platforms. However, hiring a professional can help you avoid errors and ensure compliance with all legal requirements, such as creating bylaws and maintaining the corporate book, or if a shareholders' agreement is required.
So don't hesitate to contact a professional and compare your options before embarking on the adventure alone.
How long does it take to incorporate a company in Quebec?
Using the online portals, and provided your application is complete and compliant, and the required fees have been paid, incorporation can be achieved in 2 to 5 business days.
Please note, however, that these times may vary depending on the complexity of the documents submitted.
Does an incorporated company have to file separate tax returns?
Yes, it does. An incorporated company is a separate legal entity. It must file a T2 return to report income to the Canada Revenue Agency and file a CO-17 return to report income to Revenu Québec.
Don't miss this annual obligation to avoid penalties that could be costly to your business.
Can I change my incorporation at a later date?
Yes, it is possible to change a provincial incorporation to a federal incorporation, but there may be administrative fees involved.
Rely on our lawyers to incorporate your small business in Quebec
Incorporation is a key step in structuring and developing your business in Quebec. By following the steps outlined in this article - from choosing the jurisdiction for your corporation to obtaining your certificate of incorporation - you'll be able to create a compliant, credible company that's ready to grow. Each decision, whether it's choosing a name, preparing your documents, or structuring your internal organization, is a fundamental building block for a solid business.
At T2inc.ca, we work with partner attorneys to provide you with a turnkey incorporation service. From document filing to tax compliance, our expertise simplifies every step so you can focus on your business.
Ready to incorporate your business? Contact us today to get started with peace of mind.
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