Before creating my company, I always thought that the process of incorporating was complicated, and reserved for highly qualified individuals. Fortunately, after watching a few YouTube videos and reading a couple of blog posts, it became clear to me that it’s not the case. In fact, registering a company is a straightforward process that anyone can follow. In this article I will share my experience on how I registered a corporation in Quebec (Canada), what I learned from it, and the mistakes I made along the way. Before I continue, I would like to point out that this article is for general information and entertainment purposes only. It is not legal or financial advice.
The first step in creating a corporation is to come up with a name and register it. In some places, Quebec for instance, it is possible to register a corporation with just a number. In most other cases you will need to decide on a name, and depending on where you plan to register your business, there are strict guidelines to follow. In my case in Quebec, I had to provide a three-part name which consists of, a generic and a specific component, followed by a particle. The name I registered is ‘MBCube Consulting Inc’. To register a name you need to make sure that no one else already owns it. To do so, you need to check in the official registry of your jurisdiction to see if the name is available. In my case, Quebec offers a paid service for verifying and reserving the name.
Registering the corporation
The process of registering the corporation will vary depending on where you plan to operate. In Canada there are two options: you can either register at the federal or the provincial level. There are a few key differences to keep in mind when deciding where and how to register. I found it easier to register at the provincial level and have the province provide my federal company number. This article covers the difference between provincial and federal registration in more detail. Furthermore, there are service providers out there that offer to handle all your incorporation process for you for a fee, or you can consult with a lawyer to do the same thing.
The way I did it
In my case, I opted to register everything myself provincially in Quebec. I did so by following the steps provided in this blog post by a Quebec-based lawyer, and which I will briefly reiterate next:
Step 1: Choose Your Name This step was already covered in the name registration section above.
Steps 2 & 3: Prepare Your Articles of Incorporation & Constitute a Corporation Using this service, by filling up the form, I could automatically generate and file the articles of incorporation.
Step 4: File Your Initial Declaration As soon as the previous step was completed, I was redirected to a different form which guided me through the initial declaration.
Step 5: Obtain Your Sales Tax Numbers (GST/QST) With my provincial company number in hand, I could register with Revenue Quebec and apply for my GST/QST tax numbers. Similarly, with the federal number I registered with the CRA.
Step 6: Create Your Minute Book I have yet to create the minute book for my company; I consulted with my CPA and he confirmed that since I have only been in business for less than three months, I don’t have to worry about it yet.
I highly recommend reading the whole post, it certainly saved me hours of research!
Finding a professional
In an ideal world, the correct way to go about incorporating, is to consult with a lawyer to help register the business and an accountant to handle finances. In my case, my business of IT Consulting is fairly simple, so I didn’t feel the need to consult with a lawyer early on. However, I did consult with a CPA as soon as I received all my paperwork. The tax system is very complicated and Uncle Sam is not forgiving regarding taxes, so I didn’t take any chances.
Mistakes to avoid
The first mistake I made was when using the name registration and lookup service. I wrote one variation of the name I chose that didn’t follow the three component rule. The submission I made was for two variations ’MBCube Consulting Inc’ and just ‘MBCube’ plain. I thought that since one of the names satisfies the rules it should be enough. It wasn’t, and the lookup fee is not refundable.
The second mistake I made is more specific to the Quebec process of registration. After step 3 in the process above, there is a 48 hour time limit in which the initial declaration needs to be completed. Otherwise, the process is cancelled. Fortunately, in my case the registration fee was refunded to me.
I wrote this article to share my personal experience with creating a company. In the past, I put too much weight on what it takes to own a business. But what my experience has taught me is that, in Quebec at least, creating and registering a corporation is as easy as creating a Facebook account. It can all be done online, and all it takes is a credit card and a couple of hours. The whole process can be done online and is interactive so the room for error is minimal. Nevertheless, while the process of registering a corporation is easy, it takes more than just a name on paper to generate revenue.
If I can end on one note is that, if an amateur independent consultant like myself managed to register a company and start doing business with minimal effort, anyone can! So what is your registered business name going to be?