Sole proprietorships are an attractive option for small businesses operating in Quebec. They’re simple business structures that are fast to set up and, in some cases, may not require registration. If you are considering operating your business as a self-employed individual or independent contractor in Quebec, read on to learn everything you need to know to about how to register your business as a sole proprietorship. Once you’re ready to register your business, get started in just minutes with Ownr.
What is a sole proprietorship?
A sole proprietorship is the most common business structure in Canada. The sole proprietor, as the name implies, is a single person operating a company as a self-employed individual or independent contractor. Unlike a corporation, the business is not legally separated from the owner, and they bear all the responsibilities for the financial and legal obligations of the business. The business owner must also pay personal income taxes on any profits earned.
What are the benefits of sole proprietorships?
Registering your company as a sole proprietor is simple, fast, and less costly than other business structures. If you’re looking to set up your business quickly and don’t have immediate expansion plans, it may be the ideal solution for you.
What are the tax advantages of sole proprietorships?
Depending on the income you earn as a sole proprietor, there may be certain tax considerations and other benefits for your business.
1. Simple income taxes
Your personal income taxes are easier to file as a sole proprietor than if your business is incorporated.
2. Home office deductibles
If your sole proprietorship operates from your home office, you could be able to write off some of your living expenses in order to reduce your personal taxes.
3. GST and QST numbers
In general, a business operating in Quebec needs to register for GST and QST. However, your business could be exempted from GST and QST registration if it generated less than $30,000 in a given calendar quarter or in the four preceding calendar quarters.
In some cases, it may benefit you to register for GST and QST numbers before your business has generated $30,000 in income. This is because once you register for the federal and provincial tax numbers you can:
Sole proprietorship in Quebec
Registering your business as a sole proprietorship in Quebec with Ownr is simple and fast. The purpose for registering your business is so the Registraire des enterprises can collect accurate information about all enterprises and individuals who are conducting business in the province.
Registering a sole proprietorship with Ownr
Even though you’re the sole proprietor of your business, you don’t need to do it alone! Ownr makes registration easy with just three simple steps—find a business name, fill out your information, and submit! You’ll also have access to exclusive perks, unlimited business name searches, and online chat with the customer success team to ensure you have all the support you need.
With Ownr, you can register your business as a sole proprietorship in just minutes for a one-time fee of just $49, which includes unlimited name searches. Plus, if you open a business bank account with RBC in 60 days, you’ll get that money back. Learn how to get started now.
When does a sole proprietorship need to be registered?
In most cases, business owners need to register their company in Quebec within 60 days of commencing operations. There are three main scenarios to consider when registering your business in Quebec.
A sole proprietorship operating under your exact legal name
If you’re operating your business under your exact first and last name or your exact name , there is no need to register in Quebec. This is referred to as registering as a natural person.
Example: If you’re operating your business under the name John Smith.
A sole proprietorship operating under a unique business name
However, if you are operating your business under a unique name even slightly different from your legal name, you will need to register that business. For a list of exceptions, visit the Légis Québec site for details
Example: A business called John’s Woodworking would need to register as it does not contain the full legal name. It would also very likely be rejected since the generic part of the name is not in French. The name Ébénisterie John’s would be accepted.
Exceptions based on industry
If your business is a tobacco retailer or tanning outlet, you will also be legally required to register that business within 30 days of beginning operations, even if using your exact legal name as the business name.
How to register a sole proprietorship in Quebec
If you are registering your business as a sole proprietorship yourself, you should conduct a name search to ensure that your business name is unique in Quebec. This name must be in French, but it can have a version of this name in another language.
Declaration of registration form
To register your business, you must file a declaration of registration form, available online in French. This form will include:
- Your name and any other names that you use for dealings in Quebec, if applicable
- Your home and enterprise address in Quebec
- Your main activities (sectors of operation)
- Your contact details
- Name, address, and signature of an authorized representative
Where to submit the form
You can access the forms online with the Démarrer une entreprise service. This service will walk you through the steps to register your enterprise. Note that this service is only available in French.
You can also choose to complete and submit the forms in person at one of the registry offices located in Quebec City and Montreal. For those located outside of Quebec City and Montreal, there is the option to mail the forms to the Registraire des entreprises. See their contact page for exact locations.
Pay the registration fee
The fees for registering a business as a sole proprietorship in Quebec as of 2022 are $37 for the declaration of registration or $55.50 for priority service.
If there are no issues with the business name, turnaround time is typically around one business day, or can be nearly instantaneous if you are not declaring a business name for your sole proprietorship.
Once you have successfully registered your enterprise as a sole proprietorship, you need to renew and pay the annual registration fee each year. This will cost $37 annually and business owners should also submit an Annual updating declaration form to ensure all information is up-to-date. If there are no changes to declare, the declaration that all information is up to date is filed in a joint tax return for the sole proprietorship and legal person (business owner). See more details about join filing on the Registraire des entreprises site.
How to register a sole proprietorship in Quebec FAQs
1. How much does it cost to register a business in Quebec?
The fee for a declaration of registration in Quebec is $37 (or you can request priority turnaround for an additional fee). You can conduct the business name search yourself for free in the Enterprise Registry or at a cost through various service providers.
With Ownr, the Sole Proprietorship registration fee is just $49 (including government filing fees). Plus, if you open an RBC business bank account within 60 days, you’ll get $100 refunded. Get started now.
2. How do I get an NEQ number in Quebec
An NEQ is a 10-digit numeric identifier used to represent your business and simplify dealings with government agencies. Your NEQ is automatically assigned upon business registration with the Registraire des entreprises.
3. How do I file taxes as a sole proprietor?
As a sole proprietor, you are required to report all your earnings in your personal income tax return.