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Starting A Business In Quebec
Starting a business in Quebec can be a challenging but rewarding experience.
There are many business opportunities in Quebec and many entrepreneurs have started a successful business out of this vibrant province in Canada.
We must be realistic, it’s not easy to start a business.
There are many decisions that need to be made and the proper foundation will need to be laid.
For example, here are some questions a typical entrepreneur will be faced with:
- What type of business or legal form do I need?
- Where do I register my business?
- Do I need to register for sales taxes or other?
- Do I need business permits, licenses, decals, or registration certificates?
- What administrative formalities do I need to observe?
In this article, we will provide you with the different steps on how to start a business in Quebec so you can successfully embark on your new journey.
How To Start A Business In Quebec
How do you start a business in Quebec?
What are the steps that you need to accomplish?
To help you get started, we have prepared a list of steps that a typical entrepreneur in Quebec will need to follow to commence a new business enterprise in Quebec.
Generally speaking, here are the steps to follow to if you are looking to start a small business in Montreal or anywhere in Quebec:
- Prepare a business plan
- Choose your business structure
- Choose your business name
- Register your business
- Register for taxes
- Finance your business
- Choose your business location
- Get your business permits and licenses
- Hire and manage your employees
- Business compliance
Let’s look at each of these steps one by one.
Step 1: Business Plan
The first step is to prepare a business plan for yourself.
Although you may already have a great business idea and you know exactly what you will offer in products or services, going through the process of preparing a business plan will help you dive deep into the inner-mechanics of your new business venture.
Granted, it will be time consuming and may be tedious at times, but you will benefit tremendously by doing this exercise.
Once you have a business plan, you have validated your strengths, weaknesses, the market conditions, and business potential of your idea.
There are many tools and resources you can find to help you write your business plan.
Don’t hesitate to make use of all possible resources made available to you.
Step 2: Business Structure
The second step in your business start-up process is to think about your business structure.
There are different types of business entities you can form and operate where each will have their own advantages and disadvantages.
You can start a business using any of the following legal forms:
- Sole proprietorship
- Non-profit legal entity
- Joint venture
A sole proprietorship is a business that you operate under your personal name (or trade name) where you are the sole and 100% owner.
As a result, you are responsible for all the business debt and obligations but reap full benefit of all the revenues and profits.
A partnership is similar to a sole proprietorship where two or more individuals get together to operate a business as partners.
In some cases, partners will enter into a partnership agreement where they outline each of the partner’s respective rights and obligations.
Many associate a business with a “corporation” as most international and widely known companies are formed as a corporation.
The corporation provides a limited liability protection to the shareholders who are not personally and directly responsible for the company’s debts and financial obligations.
A cooperative is less widely used and is a type of company that is owned by an association of members who pool their resources for a common purpose or need.
Non-profit organizations are businesses entities that are operated for a social purpose and not to make “pecuniary gains”.
Just like a corporation, non-profit companies are considered legal persons and are separate and distinct from their shareholders or owners.
Step 3: Business Name
The next step in the process of starting a small business in Quebec is to think about a business name.
Having a good business name can help distinguish your business from the hundreds and thousands of other businesses in Quebec.
You can use your business name as a powerful marketing tool to find and retain new customers.
However, you cannot adopt just any business name.
You must make sure that your business name is not the same or similar to that of another business registered in Quebec.
You can perform a name search in the Quebec business registry database to see if others have registered your desired business name or not.
Corporations in Quebec can also be incorporated as a numbered company.
In other words, your company will be named using numerical figures consisting of four digits, hyphen, and another four digits followed by “Quebec Inc” (XXXX-XXXX Québec Inc).
Step 4: Business Formation
Once you have found the perfect business name or decided on how to name your business, the next step is to register your business with the Registraire des entreprises du Quebec (REQ).
The REQ is the agency in charge of handling company incorporations in Quebec and managing all companies, domestic, Canadian, or foreign, registered in Quebec.
You must file your incorporation papers to form a Quebec company or registration papers if your company is already constituted under a law outside of Quebec.
Once your registration application is approved, you will receive a business enterprise number (“Numéro d’entreprise du Québec” or “NEQ”) representing a unique identification number assigned to your company.
Step 5: Business Tax Registration
Once your business entity is formed, you will need to think about how to handle business taxes.
You can obtain information on Quebec business taxes (such as GST and QST) in Quebec by going to the Revenu Quebec website.
It’s important to remember that Quebec is part of a federal system in Canada.
As such, you may have some tax obligations towards the government of Quebec but also tax obligations towards the federal government.
You should also visit the Canada Revenue Agency’s website for more information on Canadian tax obligations.
Step 6: Business Financing
Every business will need financing or capital to get off the ground.
In some cases, the entrepreneur or business founder has enough capital to inject in the company to get it to a new level.
In other cases, the founders will need to find investors, lenders, or financiers to provide the necessary capital needed by the business.
In the province of Quebec, there are many sources of business financing.
If you look hard enough, you may find the money and capital that you need to achieve your business dreams.
You can look for government financing but looking for grants and contributions made by the government.
You can also look for private financing such as:
- Financial institutions
- Credit unions
- Venture capitals
- Angel investors
There are many opportunities in Quebec, you need to persevere and knock on the right doors to get the funding that you need!
Step 7: Business Establishment
Another decision you need to make when launching a new business is where your business will be established.
Are you looking at opening a store, an office, will you be home-based?
Depending on your business location, you may need to look at certain aspect such as:
- Business operation permits
- Commercial leases
- City or municipal rules
- The resources you need to set up your establishment
- Insurance policies
Home-based businesses will generally need a city or municipal permit and they will be able to get started quickly.
However, if you are opening a store or office location, you’ll need to consider signing different types of contracts, getting insurance, and coordinating the opening of your business.
Step 8: Business Licenses
Depending on the type of business and the location where you business will be established, you may need business permits or business licenses.
In Quebec, the permits or licenses can be issued by a municipality, the City, the Quebec government or the federal government.
You must do the proper research to ensure you identify the business permits applicable to you so you apply and get the right one.
There is a tool called BizPal that can help you identify the business licenses you may need to start your business.
Step 9: Employee Management
To start a business means that you will need to put your time and energy into making it happen.
You may also need to hire employees to help you achieve your business goals.
In this context, you’ll need to think about hiring, managing, and training your employees so they can provide you with the lift that you need to take your business to a whole new level.
There are many things that you can do, such as:
- Advertise and post your jobs
- Find recruiters to help you
- Get funding to hire persons with disabilities
You should also look into your obligations as an employer when dealing with employees for matters like payroll, labour standards, and the employee registrations with the Commission des normes, de l’équité, de la santé et de la sécurité du travail (CNESST).
Step 10: Ongoing Business Compliance
Now that your business is launched and operational, you move into the phase of maintaining your company in good standing.
This means that you’ll need to file the annual updating reports with the REQ, ensure you file your company taxes with Revenu Quebec and the CRA, remit your sales taxes to the government, ensure your employees are registered for payroll and are covered for workers’ compensation and so on.
Depending on your business, you may also need to ensure your business licenses and permits remain up-to-date and in good standing.
Other Business Start-up Factors
To make sure you have a full and comprehensive overview of how to start a business in Montreal or Quebec, we wanted to share with you other aspects of business that are worth mentioning.
In addition to the 10 steps we’ve outlined above, it’s important that you also consider the following:
- Opening business accounts at a financial institution
- Getting a business credit card
- Working with an accountant for your business
- Registering business trade names (if any)
- Building a business website
- Prepare a solid marketing plan
- Make sure you handle the administrative tasks of your business
Starting A Small Business In Quebec Takeaways
So, how do you start a business in Quebec?
What are the steps that you need to take to launch a new small business?
Let’s look at a summary of our findings.
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