French business structures (SAS, SARL, auto-entrepreneur): what are the Quebec equivalents?
In Quebec, the auto-entrepreneur and the entrepreneur individuel operate a sole proprietorship; the SAS, SASU, SARL and EURL have the business corporation, the “incorporated company” (inc.), as their equivalent.
For each structure you know from France, this page gives the form provided for by Quebec law and what changes: liability, founders, registration, taxes. It covers the Quebec side only, backed by the statutes and by Revenu Québec; French rules (capital, taxation, thresholds) are for you to check on your side.
| Structure known in France | Closest equivalent in Quebec | What Quebec law says |
|---|---|---|
| Auto-entrepreneur, micro-entrepreneur, EI | Self-employed worker operating a sole proprietorship | Liability on all of one’s property (C.C.Q., art. 2645) |
| EIRL | Sole proprietorship, or a business corporation to separate one’s property | Legal person distinct from its members (C.C.Q., art. 309) |
| SAS, SASU | Business corporation (inc.), possible with a single founder | One or more founders (Business Corporations Act, s. 3) |
| SARL, EURL | Business corporation (inc., ltée, s.a.) | Name indicating a limited-liability corporation (Business Corporations Act, s. 20) |
| Société civile | General, limited or undeclared partnership | C.C.Q., art. 2188 |
| SCOP | Work cooperative | Cooperatives Act, s. 222 |
Auto-entrepreneur in France: what is the Quebec equivalent?
In Quebec, the auto-entrepreneur corresponds to the self-employed worker: an individual who operates, on their own account, an unincorporated business for the purpose of making a profit.
That is the definition Revenu Québec gives in its guide Newcomers and Income Tax (IN-119). The self-employed worker is not a separate legal form: their legal form, their legal status, is the sole proprietorship, described below. The Civil Code, for its part, defines the activity they carry on: the operation of an enterprise.
“The carrying on by one or more persons of an organized economic activity, whether or not it is commercial in nature (…) constitutes the operation of an enterprise.”
On the tax side, Revenu Québec’s memo Self-Employment and Taxation (IN-300) points out that self-employed workers report their business income in their own income tax return, attaching their financial statements or form TP-80, and pay their own contributions (QPP, QPIP, HSF) calculated on that income. Watch your actual status too: according to IN-301 (Employee or Self-Employed Person?), Revenu Québec examines the facts (subordination, ownership of tools, financial risk…) and the parties’ agreement is not enough to turn an employee into a self-employed worker. Day-to-day freelancing is covered in our Freelancer in Quebec guide.
French SAS or Quebec business corporation: what are the differences?
In Quebec, the equivalent of the SAS (société par actions simplifiée) is the business corporation: a distinct legal person, constituted by one or more founders, whose shareholders are not liable for its acts.
A business corporation is constituted under Quebec law (the Business Corporations Act) or under federal law (the Canada Business Corporations Act): our incorporation steps page helps you choose. It becomes a legal person on the date of its certificate of constitution (Business Corporations Act, s. 10). A single founder is enough: this is the Quebec equivalent of the SASU, the single-member société par actions simplifiée.
“A corporation may be constituted by one or more founders.”
A single-shareholder corporation operates normally: its board of directors may consist of one director (Business Corporations Act, s. 106) and the sole shareholder alone constitutes the shareholders meeting.
“If a corporation has only one shareholder (…) the shareholder present in person or represented by proxy constitutes a shareholders meeting.”
As in any business corporation, the shareholders’ liability is limited to their investment: they owe the corporation only the unpaid amount on their shares.
“Shareholders are not, as shareholders, liable for any act of the corporation. However, they are debtors to the corporation for any unpaid amount on shares they hold in its share capital.”
What changes first for a founder coming from France: a corporation constituted under Quebec law has its head office permanently in Quebec, and it is registered in the Quebec enterprise register (see below).
“The head office of a corporation must be permanently located in Québec.”
Auto-entrepreneur or entrepreneur individuel: and in Quebec?
In Quebec, the distinction disappears: both operate a sole proprietorship, which must be registered in the enterprise register only if its name does not include your surname and given name.
For Quebec law, a person who operates a business alone is a “natural person who operates a sole proprietorship”: it is the same form whether you call yourself an auto-entrepreneur, an entrepreneur individuel or a self-employed worker. Under a name other than your own (“Atelier Martin” rather than “Julie Martin”), registration is compulsory.
“natural persons who operate a sole proprietorship, whether or not a commercial enterprise, in Québec under a name that does not include their surname and given name”
Under your own surname and given name, it is optional: you may still request it (Act respecting the legal publicity of enterprises, s. 22). When it is compulsory, the registration declaration is filed no later than 60 days after the date on which the obligation arises.
“The registration declaration, along with the fee set out in this Act, must be filed with the registrar not later than 60 days after the date on which registration becomes compulsory.”
Our guide to legal structures in Quebec describes the sole proprietorship in detail: setup, taxation, day-to-day management.
EI, EIRL, EURL: which equivalent status to choose in Quebec?
In Quebec, the EI becomes a sole proprietorship; if you are looking for the limited liability of the EIRL or the EURL, incorporate a business corporation, which may have a single shareholder.
A Quebec sole proprietorship does not isolate a business patrimony: you answer for your obligations with all of your property (see below). At most, you can agree with a given creditor to be bound only on certain property.
“However, the debtor may agree with his creditor to be bound to fulfil his obligation only from the property they designate.”
Separating your property therefore requires a legal person: the business corporation is distinct from its members, and its acts bind only itself. For the equivalent of an EURL, a single founder is enough (see the SAS); a director need not be a shareholder, unless the articles provide otherwise (Business Corporations Act, s. 109). To decide between staying a sole proprietor and moving to a corporation, see When should you incorporate in Quebec?.
“Legal persons are distinct from their members. Their acts bind none but themselves, except as provided by law.”
SARL: what is the limited-liability equivalent in Quebec?
In Quebec, the equivalent of the SARL is the business corporation: its name must indeed show, through “inc.”, “ltée” or “s.a.”, that it is a limited-liability corporation.
Quebec law itself uses the expression: a name that includes neither “société par actions” nor “compagnie” must end with one of these three abbreviations. “Tremblay Design inc.” and “Tremblay Design ltée” are therefore two ways of displaying the same legal form.
“If a corporation’s name does not include the term (…) it must comprise the abbreviation (…) at the end to indicate that the corporation is a limited-liability corporation.”
The vocabulary changes as well: in a business corporation, the owners are shareholders, who hold shares entered in the corporation’s securities register (Business Corporations Act, s. 2), not partners holding parts. Their liability is limited just as for the SAS equivalent (Business Corporations Act, s. 224): “inc.” and “ltée” do not designate two different forms, but the same business corporation.
Does the micro-entreprise exist in Quebec?
No, not as a legal form: a person operating alone runs a sole proprietorship. The closest Quebec notion is a tax one: the “small supplier”, exempt from registering for sales taxes.
In the list of persons and groups required to be registered (sole proprietorship, general or limited partnerships, legal persons, trusts…), no form is called a micro-entreprise (Act respecting the legal publicity of enterprises, s. 21). A micro-entreprise coming from France therefore becomes, in Quebec, a sole proprietorship (see above), or a business corporation if you want to separate your property.
The threshold that matters at the start is the tax one: as long as your taxable sales stay below the small supplier threshold (see GST and QST), you are not required to register, and voluntary registration remains possible, according to Revenu Québec’s memo Information for New Businesses: QST and GST/HST (IN-256). This threshold creates no status: it applies to the sole proprietorship and to the corporation alike.
“Every person who makes a taxable supply in Québec in the course of a commercial activity engaged in by the person in Québec is required to be registered, except where (…) the person is a small supplier (…)”
Sole proprietor: what liability in Quebec?
Unlimited: in Quebec, a sole proprietor answers for the debts of their business with all of their property, movable and immovable, present and future, except property exempt from seizure.
You and your sole proprietorship are one and the same: a contract it signs or a debt it incurs is yours, and your personal property is the common pledge of your creditors, the business’s creditors included.
“The property of a debtor is charged with the performance of his obligations and is the common pledge of his creditors. (…) Any person under a personal obligation charges, for its performance, all his property, movable and immovable, present and future (…)”
This is the main difference from the business corporation, whose shareholders are not, as shareholders, liable for the acts of the corporation (see the SAS). The full comparison is in our guide Incorporated or registered: which legal structure should you choose?.
Creating the equivalent of an SAS in Quebec: the steps
Four stages: draft the articles of incorporation, send them to the Registraire des entreprises with the fees, receive the certificate that brings the corporation into existence, then file the initial declaration within 60 days.
- The articles of incorporation contain, among other things, the corporation’s name, or a number designation (the “numbered company”), the names and addresses of the founders, the rights and restrictions of each class of shares, the restrictions on share transfers and the number of directors (Business Corporations Act, s. 5);
- Filing: signed by the founders, they are sent to the Registraire des entreprises with the required documents and the prescribed fees;
- The certificate of constitution: the corporation exists and becomes a legal person on the date shown on it (Business Corporations Act, s. 10);
- The initial declaration, to be filed within 60 days of registration, which follows automatically from the filing of the articles (see below).
“The articles of a corporation, signed by the founders, the documents required to be filed with them, and the fee set out in the Act respecting the legal publicity of enterprises (…) must be sent to the enterprise registrar.”
“(…) the legal person must file with the registrar, within 60 days after the date of registration, an initial declaration in compliance with the form and content prescribed for a registration declaration.”
Each step is detailed on our incorporation steps page: name, head office, directors, articles, filing with the Registraire.
Your Quebec business corporation, prepared and filed for you
Articles of incorporation, filing with the Registraire des entreprises and initial declaration: an online form of about 20 minutes, and we take care of the file. The all-in price is shown on our costs page.
Registering an SARL or an SAS: how to do the equivalent in Quebec?
For a Quebec business corporation, there is nothing to apply for: the Registraire des entreprises registers it on its own when the articles are deposited and assigns its Québec business number (NEQ).
In Quebec, the public register of businesses is the enterprise register, kept by the Registraire des entreprises. For a corporation constituted in Quebec, registration takes place on the deposit of its constituting instrument, with no separate registration declaration.
“The registrar registers a registrant (…) in the case of a legal person constituted in Québec, on the deposit in the register of its constituting instrument in accordance with the law applicable to legal persons of its kind.”
The Registraire then assigns the NEQ, records the date of registration and enters it on the articles. A sole proprietorship, for its part, registers by filing a registration declaration (see above).
“The registrar registers a registrant by assigning a Québec business number to the registrant and recording in the register the date of registration and the information concerning the registrant.”
Does your French company do business in Quebec? A legal person not constituted in Quebec must also register there if it is domiciled there, carries on an activity there or holds an immovable real right there.
“legal persons established for a private interest not constituted in Québec (…) if they are domiciled in Québec, carry on an activity in Québec, which includes the operation of an enterprise, or possess an immovable real right, other than a prior claim or hypothec, in Québec”
An address, an establishment, a post office box or a telephone line in Quebec, or any act performed there for profit, is enough to presume that it carries on an activity there.
“(…) has an establishment, a post office box or the use of a telephone line in Québec or performs any act for profit in Québec is presumed to be carrying on an activity or operating an enterprise in Québec.”
Sole proprietorship: is French VAT (TVA) the GST and QST in Quebec?
In Quebec, a taxable sale bears two taxes: the federal GST, at 5%, and the QST, at 9.975%. Registration is compulsory, except notably for small suppliers.
The GST (goods and services tax) is provided for by a federal statute, the QST (Québec sales tax) by a Quebec statute; each is calculated on the selling price.
“(…) every recipient of a taxable supply made in Canada shall pay to Her Majesty in right of Canada tax in respect of the supply calculated at the rate of 5% on the value of the consideration for the supply.”
“Every recipient of a taxable supply made in Québec shall pay to the Minister of Revenue a tax in respect of the supply calculated at the rate of 9.975% on the value of the consideration for the supply.”
A small supplier is a business whose taxable sales, together with those of its associates, do not exceed $30,000, either in a calendar quarter or over the four preceding calendar quarters (IN-256); it does not have to register (see the micro-entreprise).
“(…) a person is a small supplier throughout a particular calendar quarter and the first month immediately following the particular calendar quarter if (…) does not exceed the total of (b) $30,000 (…)”
Once registered, the business collects the taxes on its sales and can generally recover those it pays on its business purchases (input tax credits and input tax refunds). If you later move from a sole proprietorship to a corporation, you need new GST and QST numbers and must cancel the former entity’s registration, according to the IN-256 memo. See our guide to GST and QST numbers and the GST/QST calculator.
FAQ — French structures and their Quebec equivalents
Does the société civile exist in Quebec?
Not under that name: under the Civil Code of Québec, partnerships are general, limited or undeclared partnerships; they may also be in joint-stock form, in which case they are legal persons (C.C.Q., art. 2188). Partnerships are described in our guide to legal structures.
SCOP: what is the cooperative equivalent in Quebec?
In Quebec, the form that brings workers together to operate a business jointly is the work cooperative: it is made up exclusively of natural persons and its object is to provide work to its members (Cooperatives Act, s. 222). At least three founders are required to apply for the constitution of a work cooperative (s. 223.1).
Salary or dividends: how does it work in a Quebec corporation?
A salary is paid as to any employee: the employer withholds income tax and contributions at source (Revenu Québec, IN-119). A dividend, for its part, is declared by the board of directors, unless the articles or a unanimous shareholder agreement provide otherwise (Business Corporations Act, s. 103), and it is prohibited if there are reasonable grounds for believing that the corporation would then be unable to pay its liabilities as they become due (s. 104). The mix between the two is decided with your accountant.
Self-employed worker or corporation: what tax do you pay in Quebec?
A self-employed worker reports business income in their own personal income tax return and pays their own tax and contributions, by instalments if required (Revenu Québec, IN-300 and IN-119). A business corporation is a separate taxpayer: it files its own return for each taxation year (Taxation Act, s. 1000). The rates that apply in each case are compared with an accountant.
Creating a holding company in Quebec when you know the SARL holding: how do you do it?
In Quebec, a holding company is an ordinary business corporation that holds shares of another corporation; the founder of a corporation may in fact be a legal person (Business Corporations Act, s. 4). A corporation that receives a taxable dividend from a taxable Canadian corporation can in principle deduct it in computing its taxable income (Income Tax Act, s. 112(1)). Our management company guide explains when and how to create one.
Is your project ready? Your business corporation is created online
Whether you come from an SAS, an SARL or the auto-entrepreneur regime, a Quebec business corporation is incorporated entirely online: articles, filing with the Registraire and initial declaration. For a holding company, the process is the same.
Incorporate your business in Quebec
A form of about 20 minutes; we prepare and file your incorporation file, government fees included.