Entrepreneurship & Small Business

Incorporation (solo contractor) questions

  • Last Updated:
  • Apr 17th, 2017 5:39 pm
[OP]
Newbie
Apr 14, 2017
1 posts

Incorporation (solo contractor) questions

Hi,

I am a new graduate from BC. I took a job in Montreal as a software developer contractor for a company (let's call it company C) through a headhunting agency(let's call it Agency A).
So technically I work Agency A while doing work for Company C. The one condition was that I had to be incorporated.

I took the job offer and started working a few days later in Montreal. I did that online at http://www.registreentreprises.gouv.qc.ca/en/. I put myself as the President of the company and I put "none for now" for directors, shareholders etc. I didn't have the time, I took the offer and relocated and started work in less than 5 days. A few days later I got a company name and #. I then called Revenue Agency and registered my company and got a GST/QST/Payroll #. What do I do with those numbers?

Now what do I do? I don't understand the conflicting instructions on what I need to do next to structure my company and pay myself. It seems like I can pay myself salary or a dividend. In fact I read somewhere that another contractor in my position was somehow paying dividends to his family members who were not working. In fact I would like to do that to pay back my single mom who raised and supported me through school.

Can someone point me to the right place for all this? or do I need to see an accountant on setting up my company?

Any advice would be greatly appreciated.
2 replies
Newbie
Apr 15, 2017
7 posts
I am basically in the exact same situation. Incorporated about a ~month ago.

One thing that I did not know about is the idea of the CRA labelling me a PSB (read info about that here: https://www.thebalance.com/costs-of-dec ... rp-2948621).

At this point, I am still trying to figure out what likelihood that people in our situation are labelled PSBs because that greatly affects our ability to gain any type of tax advantage and ability to write things off as well as how I should pay myself.
Penalty Box
Feb 26, 2017
14 posts
2 upvotes
Hey,

So now since you are registered for QST, you have to charge that to the company who has contracted you, so I would see if the money is being paid by company C or Agency A. So if your weekly wage is $1,000/- you will present them an invoice including QST for 1,097.50/-. You have to remit the additional $97.50/- to CRA assuming you have no ITC's (for the simplification of the example).

You would be able to add your mother as a shareholder and pay her through dividend and also yourself but that depends on what you have mentioned on your articles of incorporation.

Do let me know if you have more questions.

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