The Basics of Starting a Business in Quebec

1. Choosing the Legal Structure of Your Business

Before doing anything else, you must determine the right legal structure for your project. The most common options are:

• Sole proprietorship (operating under your own name)
• Corporation (incorporated business)

Each structure has different implications for taxes, liability, and management.

2. A Company in Quebec or Canada?

A company can be incorporated under Quebec law or Canadian law. This choice does not affect where the business can operate — a Quebec-based company can do business anywhere in Canada or internationally. There’s no restriction based on the jurisdiction of incorporation.

However, any company must register in the province or country where it operates, regardless of whether it’s incorporated under Quebec or Canadian law.

While there are some legal differences between a Quebec and Canadian corporation, many people mistakenly believe that incorporating federally (in Canada) automatically grants more international credibility — which isn’t true.

Moreover, a Quebec corporation allows its entrepreneurs to be foreign residents, whereas a Canadian (federal) corporation requires the majority of its directors to be Canadian residents.

For these reasons — and to allow us to automate the incorporation process as much as possible — we only offer incorporation in Quebec.

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3. Choosing and Protecting Your Business Name in Quebec

a)  Choosing the Name

• The name must be distinctive, available, and French.
• To be distinctive, it must be unique. Example and counterexample: a bad name would be Table Inc., and a good name would be Pratico Inc.
• To make it available, simply search the Registraire des entreprises du Québec (REQ) using their online tool.
• To be French, it must comply with the Charter of the French Language. A good tool to check is the Grand dictionnaire terminologique, which the Office de la langue française makes available online.
• You can choose a distinctive name in another language, but this name must be preceded by a descriptive term in French. For example, if you want to use the name Third Cup, you would have to precede the term "Third Cup" with a descriptive French term: Café Third Cup Inc.

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b) Protecting the Name

• Registering your name with the REQ is mandatory and theoretically prevents other businesses from using the same name in Quebec. However, this does not protect your name.
• For enhanced protection, register your name and logo as a trademark with the Canadian Intellectual Property Office. This gives you exclusive rights to this name for your products/services throughout Canada.

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4. Incorporation and Registration

a) Drafting of the Articles of Incorporation
The articles of incorporation define the structure, operating rules, shareholder rights, and management procedures. We take care of providing articles that meet your need with multiple categories of shares.

b) Choice of Registered Office
Determine the official address of the company, which will appear in the incorporation documents. It must be in Quebec for a company created in Quebec.

c) Appointment of Directors
Appoint the directors and officers of the company, who will be responsible for governance and operations.

A Secretary, a Treasurer, and a President are required. One person may hold more than one role.
The directors must register their place of residence. They may be foreign residents.

d) Registration with the REQ (Registraire des entreprises du Québec)
The required documents are filed with the REQ to formalize the creation of the company. The initial declaration is then filed with the REQ.

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5. Essential initial contracts

• Shareholders' agreement (if there are multiple shareholders): defines the rights, obligations, and conflict management procedures. It is highly recommended that you draft and sign a shareholders' agreement if you have multiple shareholders. This is the time to discuss what happens if things go well, but also if they go badly. At the beginning, everything is fine, and this is the ideal time to have more difficult discussions and put them on paper to avoid future conflicts. Most shareholder conflicts could be avoided with a shareholders' agreement.

• These contracts protect the company and clarify the obligations of each party.
• Employment contracts: for employees, specifying the conditions of employment.
• Service or supplier contracts: to govern relationships with your partners and service providers.
• General conditions of sale or service: if you sell products or services.

These contracts protect the company and clarify the obligations of each party.

6. Opening a professional bank account

• Mandatory for separating personal and business finances, and for accounting management.
• Opening a bank account is possible as soon as you receive the REQ's articles of incorporation. You can send this document to your banker to begin the bank account opening process. If you don't have a banker, you can contact us for references.

7. Other important steps

• Bookkeeping: Establish a rigorous accounting system from the start. If you have an accountant, they can help you. If you don't, you can contact us for references.
• Obtain the necessary permits and licenses according to your sector of activity.
• Register for taxes (GST/QST): If you have created a company, it is generally recommended to register for taxes. We can help you with this process. Being registered brings with it obligations (compiling GST/QST reports, keeping accounts that calculate the balance of amounts due, etc.) but it allows you to deduct the GST/QST portion of eligible expenses.