07.03.2021
Corporate tax
Featuring

Starting a business is a long but necessary process.

New entrepreneurs can get a little confused by the various steps that need to be taken and obligations that need to be met, one of which is registering their new business.

To make your life a little easier, here is everything you need to know about registering a business in Quebec.

Why register a business?

One of the main purposes of the Act respecting the legal publicity of enterprises is to keep a record of the majority of companies and persons doing business in Quebec, whether incorporated or not.  This information is recorded in the Registre des entreprises du Québec (REQ) and is available to the public, business partners and government organizations.

By filing a declaration of registration, businesses also get a Quebec enterprise number (NEQ), which makes it easier for a business to identify itself to other organizations.

Who should file a declaration of registration?

The REQ states that most companies and persons conducting business activities in Quebec must file a declaration of registration. This includes:

  • Natural persons who operate a sole proprietorship in Quebec, under a name that does not include their first and last names
  • Natural persons who operate a tobacco retail outlet or a tanning salon, regardless of whether they operate the enterprise under their first and last names
  • General and limited partnerships constituted in Quebec
  • Legal persons not constituted in Quebec if they carry out an activity in Quebec, including the operation of an enterprise, or possess an immovable real right in Quebec other than a priority or a hypothec
  • Legal persons not constituted in Quebec if they maintain their domicile in Quebec, carry out an activity in Quebec, including the operation of an enterprise, or possess an immovable real right in Quebec other than a priority or a hypothec
  • Legal persons constituted under a law other than a Quebec law if they maintain their domicile in Quebec, carry out an activity in Quebec, including the operation of an enterprise, or possess an immovable real right in Quebec other than a priority or a hypothec
  • Legal persons established for a private interest that are not constituted in Quebec and that result from an amalgamation, other than a short-form amalgamation within the meaning of the Business Corporations Act

However, businesses constituted in Quebec that have already filed a declaration of registration of a legal person with the register of sole proprietorships do not need to file a declaration of registration. They are automatically registered when they are constituted.

How to register a business

There are several ways to register a business in Quebec. These methods differ depending on the chosen business structure.

The business registration services are as follows:

  • Initial declaration of a legal person
  • Declaration of registration of a natural person
  • Declaration of registration of a partnership
  • Declaration of registration of an association or group of persons

Information and documents required to register a business

Unsurprisingly, a variety of basic information and documents are required in order to register a business. The information required may differ somewhat depending on the type of business being registered, but is generally pretty similar:

  • Applicant’s full name
  • Natural person’s name, and any other name they use in the performance of their duties
  • Natural person’s address
  • Address of the elected domicile and name of the person mandated to receive documents for the natural person
  • The two main sectors the business operates in, in order of importance
  • The number of employees working in Quebec

Fees for filing a declaration of registration based on the legal structure of the company

The fees for filing a declaration of registration vary depending on the structure of the company. Here are the fees for 2021:

  • For-profit legal person or trust:

Regular: $347
Priority: $520.50

  • Non-profit legal person:

Regular: $36
Priority: $54

  • Cooperative:

Regular: $36
Priority: $54

  • Natural person:

Regular: $36
Priority: $54

  • Association or other group of persons:

Regular: $36
Priority: $54

  • Partnership:

Regular: $55
Priority: $82.50

Registered businesses are also required to pay the REQ an annual registration fee. The fees for 2021 are available on the REQ website.

Legal obligations of registered businesses

After completing their registration, companies have certain legal obligations to fulfill.

Annual update

Every year, registered businesses are required to file an annual updating declaration during the prescribed period. This step is mandatory for all businesses in the Registry, regardless of whether or not they have any changes to report. The obligation takes effect the year after the business registers.

If the update is filed after the prescribed period, the business must pay a late filing fee.

There is an exception for registered legal persons and sole proprietorships, which are allowed to file their annual update at the same time as their tax return. If all the information in the register is correct, the business can simply check the appropriate box on line 39 of the CO-17 tax return.

Current update

If changes occur after the annual update, businesses must file a current update. Registered businesses are required to declare changes within 30 days.

Rules for choosing the name of a new company

When filing a declaration of registration, companies must give their business a name. However, the name must comply with the rules and standards set forth by the REQ.

Types of names

There are two types of business names in Quebec: constituted names and other names.

The constituted name is the legal name of a business. The other name can be used to do business in Quebec.

If a company has more than one other name, they must all be registered with the REQ.

French requirement

The name a company uses to do business in Quebec is subject to the regulations set forth in the Charter of the French language. This is a legal condition for creating a corporation.

Using a trademark in a language other than French

A trademark in a foreign language can be registered as the “other name” of your company if certain conditions are met. The name must be the one you use to carry out activities in Quebec or must be used in the ownership of an immovable real right (other than a priority or a hypothec).

Email addresses and domain names

If you use one or more domain names, such as T2inc.ca, to do business in Quebec, you must register them with the REQ. An email address cannot be used as a constituted or other name for a business.

T2inc is here to help you incorporate your business

Registration is an important step in the creation of a new business. Even though the process can seem labour-intensive, it is essential in order to do business in Quebec.

Thinking of incorporating your company in Quebec? T2inc can guide you through each step to turn your business into a corporation.

Don’t hesitate to contact us to get personalized support from our tax accountants.

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