Incorporation

Starting your own business means creating a limited company, that is, a legal entity separate from you. The company has its own assets and liabilities, separate from yours. Canada This is done at the federal level (Corporations) Canada ) or at the provincial level (in Quebec, the Registrar of Enterprises).

Brief

Create a limited company: a legal entity separate from you
This is done at the federal level (Corporations) Canada ) or at the provincial level (Quebec Enterprise Registrar);
Protects your personal assets (limited liability) and gives access to the reduced SME (small and medium-sized enterprise) tax rate, approximately 12%.
Adds obligations: two corporate tax returns (T2 federal, CO-17 Quebec), business registries and numbers
Obligation continue : chaque année, la société doit aussi déposer sa déclaration de mise à jour au Registraire des entreprises du Québec (REQ), en plus de ses déclarations fiscales

Why does this matter?

Imagine a barrier between your personal money and your business's: if the company incurs debts, your personal assets (house, savings) are generally protected. This is called "limited liability." As an added bonus, a company pays a reduced tax rate of around 12% in Quebec on its initial profits, compared to over 50% at the highest personal tax rate. However, incorporating adds fees and separate filing requirements: it's not always cost-effective initially. Bankeo connects you with a certified accountant or CPA (Chartered Professional Accountant) free of charge. They will calculate your break-even point, choose the right structure, and handle the necessary paperwork. We'll be there to support you every step of the way.

Concrètement, ce taux réduit d'environ 12,2 % s'applique aux premiers 500 000 $ de bénéfice d'une PME admissible : sur 100 000 $ gardés dans la société, l'impôt tourne autour de 12 200 $, contre plus de 50 000 $ si la même somme était imposée à votre taux personnel le plus élevé. En échange, la société produit chaque année sa déclaration T2 (et la CO-17 au Québec), et vous décidez de vous verser un salaire ou un dividende. L'existence et les obligations de la société sont par ailleurs tenues à jour auprès du Registraire des entreprises du Québec (REQ). Les taux d'impôt applicables aux sociétés sont détaillés par Revenu Québec. Savoir si le jeu en vaut la chandelle est un calcul, pas une intuition : Bankeo vous présente sans frais le comptable qui le fait et vous accompagne, toujours.

Frequently asked questions

What does it mean to incorporate, in simple terms?

This involves transforming your business into a limited company, a legal entity separate from you. The company has its own assets and liabilities, separate from your personal money. You become a shareholder (owner) and often a director (manager).

At what income level does it become advantageous?

There's no magic number. It depends on your profits, what you reinvest in the business, and your tolerance for paperwork. Generally, incorporation becomes worthwhile when you leave money in the company rather than spending it all personally.

Federal or provincial: which one to choose?

The federal constitution protects your business name everywhere. Canada The provincial option (in Quebec) is often simpler and less expensive if you work primarily in Quebec. The best choice depends on your business activities. Bankeo will introduce you to a verified accountant or CPA free of charge, who will make the decision with you and handle the necessary paperwork. We'll be there to support you every step of the way.