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By activityProfessional services

Start a consulting business in Canada

Management, IT, marketing, HR or strategy consultant: the structure, steps, registrations and tax that matter when you sell your expertise, alone or as a pair. No sector licence in most cases, but a tax threshold not to miss.

Incorporate my consulting firmShould I incorporate?
Photo 4:3 · consultant in a client meeting · glass meeting room, whiteboard, natural light; Montreal or Toronto

Which structure for a consultant?

Three realistic options. The right one depends mostly on your income, what you leave in the business and who your clients are.

Sole proprietorship

You invoice in your own name. Simple to start, but nothing shields your personal assets from business commitments.

Liability
Unlimited
Start-up cost
0 to [amount]
Tax
Personal income

Who for: first contracts, income under [amount], side activity.

Recommended from $60,000

Corporation

A separate legal person employs you and invoices your clients. Limited liability, tax deferral, credibility with large accounts.

Liability
Limited to company assets
Start-up cost
$149 + registry fees
Tax
Small-business rate on retained profit

Who for: income above $60,000, corporate clients, growth plans.

General partnership

Two or more consultants, unincorporated. Shared income and liability; a written agreement is essential.

Liability
Joint between partners
Start-up cost
[amount] to register
Tax
Each partner’s personal income

Who for: a duo testing a collaboration before incorporating.

Steps

From idea to first invoice

A consultant can be up and running in a week: incorporation takes one to three days, the rest depends on the bank and insurance.

  1. Validate the offer and nameA clear name with a term from your field (“Consulting”, “Strategy”, “Solutions”) checked with Nuans and the registries. A numbered company works too.Day 0
  2. Choose the jurisdictionProvincial if your clients are in your province; federal if you work across Canada or for out-of-province clients.Day 0
  3. IncorporateTen minutes in the flow, e-signature, filed the same day. Certificate within 1–3 days depending on the registry.Day 0–3
  4. Open the business bank accountWith certificate and articles, most banks open the account within days. Separate from the first dollar.Day 3–7
  5. Register for sales taxGST/HST mandatory from $30,000 of taxable sales over four quarters; QST in Quebec. Optional before, to recover taxes paid.Day 3–10
  6. Insure the businessProfessional liability (errors and omissions) is often required by corporate clients; [amount]/yr for [amount] of coverage.Day 7–14
  7. Standard contract and first invoiceServices contract, IP and confidentiality clauses, net-30 terms. Free templates reviewed by a lawyer.Day 14

Licences and permits: rarely, but check

Consulting isn’t a regulated activity in itself. Three cases are exceptions, and two registrations are mandatory whatever the activity.

  • General consultingManagement, strategy, marketing, IT, operations: no specific licence in Canada. Just check “home office” use with your municipality.No licence
  • Reserved titles“Engineer”, “CPA”, “psychologist”, “architect” and other professional-order titles can’t appear in your name or offer unless you’re a member. See “Professional corporation”.Professional order
  • Financial or investment adviceAdvising on securities or insurance requires registration with the AMF (Quebec) or the provincial regulator.Regulated
  • Immigration consultantReserved for regulated Canadian immigration consultants (RCIC) and lawyers.Regulated
  • Business number and program accountsCRA BN assigned at incorporation; GST/HST and payroll accounts if you pay yourself a salary. Included from Complete.Mandatory
  • Provincial registrationAny company operating in Quebec registers with the REQ; extra-provincial registration elsewhere for a federal company.Mandatory
Tax

What incorporating changes for a consultant

The tax gain comes from deferral: income left in the company is taxed at the small-business rate, well below your personal marginal rate. If you spend everything you earn, the advantage fades.

Watch out for personal services business (PSB) rules. If you work for a single client, on their hours, with their equipment, the CRA can recharacterize your company and deny the small-business deduction. Diversify your clients or get advice.
Small-business tax rateFederal + provincial on the first tier of eligible income (SBD).[xx]%
Top personal marginal rateWhat you’d pay on the same income as a sole proprietor, above [amount].[xx]%
GST/HST registration thresholdTaxable sales over four consecutive calendar quarters.$30,000
Salary or dividendSalary creates RRSP room and CPP/QPP; dividends avoid contributions. Often a mix.Both
Annual filingsFederal T2, CO-17 in Quebec, financial statements, annual resolutions.Every year
Rates and thresholds to verify on [date] · Sources: CRA, Revenu Québec · Reviewed by Sophie Lemieux, CPA. General information, not tax advice.

Tools and guides for consultants

All resources →
SimulatorShould I incorporate?Enter your income and personal spending: estimated tax saving from deferral.Start →Tip sheetSalary or dividend: paying yourselfTrade-offs for a solo consultant, reviewed by a CPA.Read →Free templateConsulting services agreementIP, confidentiality, limitation of liability, net-30 payment.Download →GuidePSB: avoiding CRA recharacterizationCriteria, warning signs and fixes when one client dominates.Read →

Consultants’ questions

« I was billing $95,000 a year in my own name. Incorporating Atelier Nordique let me pay myself a reasonable salary and keep the rest in the company for slow months. »
Amélie TremblayConsultant, Montreal
At what income is incorporating worth it?
Often around $60,000 to $80,000 of net income, if you can leave part of it in the company. Recurring costs (accountant, filings) run about [amount]/yr; the simulator runs the numbers with yours.
Can I incorporate while still employed?
Yes, nothing prevents it legally. Check your employment contract (exclusivity, non-compete, IP) before invoicing.
Can a single client be a problem?
For tax, yes: with one client treating you like an employee, the CRA can deem your company a PSB and deny the small-business deduction. Diversify or document your independence.
Federal or provincial for a consultant?
Provincial if your clients are mostly in your province ($397 in Quebec, $300 in Ontario). Federal ($200) if you work everywhere or target national clients, plus registration in your province.
Do I charge GST to a foreign client?
Exported services are generally zero-rated (0%), but you still need to register if you exceed $30,000 of worldwide taxable sales. Confirm with your accountant.
Do I need insurance?
No legal requirement for general consulting, but corporate clients often require [amount] of professional liability. Budget [amount]/yr.

Your consulting firm, incorporated this week

From $149 + registry fees ($200 federal, $397 Quebec, $300 Ontario). GST/QST registrations included from Complete.

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