- My Goals and Objective
- Step 1: Choose your Business Form
- Step 2: Choose your Business Name Wisely
- Step 3: Start selling your Art
- Step 4: Declare your Income or Loss
My Goals and Objective
In order to provide some context with respect to the research I did, let me start by outlining my goals and objective, so that you can decide if they are somewhat similar to your own.
My goals: to create a business to be located in Quebec, Canada, with the intention of selling fine art as a part-time business. I would like to create paintings, studies and printed products and sell them to the public.
Step 1: Choose your Business Form
If you want to be an artist in Canada, you will most likely start out as a Sole Proprietorship (in the province of Quebec, an Entreprise individuelle), which is the business form most artists operate to run their business.
Being a Sole Proprietor allows you to be self-employed and to conduct business. As the simplest business form available, the Sole Proprietorship is easy to setup and there is actually no differentiation between you and your business. All your sales, purchases and actions happen in a business context but they are basically in your own name. All your business income is added to and taxed with your other personal income, such as full-time or part-time employment.
The following are lists of the pros and cons of a Sole Proprietorship:
Advantages of Sole Proprietorships
- Easy and inexpensive to register
- Administrative burden is minimal
- As the sole owner you make all business decisions
- Hardly or no working capital is required for start-up
- Some tax advantages if your business is not performing well; for example, you may be able to deduct your losses from your personal income
- You own all profits
But there are also downsides to consider:
Disadvantages of Sole Proprietorships
- Unlimited liability (if you have business debts, claims can be made against your personal assets to pay them off)
- Income is taxable at your personal rate (income is added to and taxed with your other personal income)
- You are the business; the business cannot be transferred, sold or inherited
- Raising capital could be difficult
There are also other forms of businesses like Partnerships, Corporations or Co-Operatives, but for artists, the Sole Proprietorship is the most common. Therefore I assume it will meet most readers’ needs.
Step 2: Choose your Business Name Wisely
You basically have the choice between a business name which you will need to register (a fictional name), or going with your own name.
Going with a fictional business name:
- A business name which is not your personal name has to be registered with the Régistre des enterprises.
- If you decide to formally register your business, there is a wait time as they will need to perform a check.
- The name might not be granted if it is already taken or is legally protected.
- Research early on in the process if web domains and social media aliases are available for your chosen name. If so, you should consider protecting the business name by registering it.
- Think long-term and don’t limit yourself with niche names (for example, Splashing Inks Creations), as your topics and mediums might change over the years.
- Make sure to test your business name ideas with family and friends and get as much feedback as possible.
Going with the artist’s personal name:
- In the fine arts industry, fictional business names are rather unusual; most of the time, the artist’s name serves as the brand for the business.
- Using the artist’s name gives the business a personal touch and has long-term potential.
- Also, this allows you to get started right away with setting up the website and marketing yourself online.
- Another benefit to going with your own name is that you are sure to avoid infringing on any existing brand names.
Considering the previous points, it was clear for me that I wanted to choose the easiest path and just use my personal name. I decided to use Art by Martin Lukas Ostachowski (abbreviated to ArtbyMLO). I am running the website on ostachowski.com and artbymlo.com (which is being redirected to ostachowski.com). Also, I saved most social media aliases as @artbymlo.
Step 3: Start Selling Your Art
With a Sole Proprietorship, selling your artwork is really simple. If you also use your first and last name as your business name, you can basically start selling your art right away. (Please note that restrictions apply to other forms of business and trade).
A few words on Sales Taxes
- If you’re starting out, you will probably earn less than $ 30,000 during the first few years, which is the limit (Below 30, 000, it is not mandatory to register. Above 30,000, you must register for and collect Provincial and Sales Tax).
- As an example, let’s consider the average annual salary of $ 21,083 (full time) and $ 15,055 (part-time) in the arts across Canada; in this case you don’t need to register for Provincial and Sales Tax.
- Therefore, you don’t add any taxes to your prices. For example: a painting with a price tag of $ 100 is also sold with a $ 100 final price on the invoice.
- If you intend to sell imported goods or act as an arts and crafts reseller, please consult a professional, you might have to register for sales taxes.
Step 4: Declare your Income or Losses
- After a successful first year in business, it’s time to declare your profit or losses on both Federal and Provincial (Quebec) tax returns.
- You will need to fill out form TP-1 Schedule L on your personal tax return and include a Financial Statement of Business in form TP-80-V.
- Visit the CRA website for current information and forms.
Recap of the Four Steps to Starting your Art Business in Quebec, Canada
- Choose the business form: Sole Proprietorship
- Choose your business name: use your personal name
- Start selling your masterpieces
- Declare your income and financial statement
A few last tips:
Contact local organizations which support entrepreneurs for advice and guidance.
In my case, I contacted SDE région de Thetford (Société de développement économique de la région de Thetford), an organization which supports startups in my region. They were able to answer all of my questions and guide me to the right people for more information.
I hope this article helped you realize how easy it is to start your art business in Quebec. Now it’s time to get back to the studio and create the first masterpiece to be sold!
Please note: I’m not a lawyer or accountant, and this is not legal advice. Therefore I cannot be held responsible for information. Please consult a professional to discuss your situation. Also note that legislation might change since this article was posted and could differ by province and country. That being said, you will likely still find some useful pointers in this article.
Sources & Further Information:
- Business Forms
- Artist and Artisan Salary Statistics
- CRA & Revenue Quebec Information for Sole Proprietorships
- The Enterprise Register: Waived Registration Requirements