Using subcontractors: where your liability sits

Incorporate in Sainte-Catherine from $999, government fees included. Suited to businesses that rely on subcontractors and suppliers.

Incorporate a Business in Sainte-Catherine | Lexstart
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Light industry and services in the Roussillon

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Sainte-Catherine: light industry and business services

Sainte-Catherine sits in the Roussillon industrial corridor, with light manufacturing, logistics, construction, specialized workshops and business services. Many of these companies run with a small core team and hand part of the work to subcontractors.

That model is efficient, but it shifts risk without removing it.

Your client does not see the difference

When you hand part of a mandate to a subcontractor, your client remains your client. If the work is poorly done, late or causes damage, they sue you. You can then turn to your subcontractor, but that assumes they are solvent, insured, and that your written agreement provides for it.

As a sole proprietor, that liability chain ends at your personal assets. In a corporation, it stops at the business. That is a major difference for an SME coordinating several parties on one job site or contract.

  • A separate legal person carrying liability toward the end client
  • Subcontracting agreements signed by the business, not by you
  • A reduced tax rate on the first $500,000 of eligible active business income
  • Easier to impose insurance and compliance requirements on subcontractors

Online incorporation, reviewed by lawyers

Our pricing includes government fees. See our online incorporation guide or start your incorporation.

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What a good subcontracting agreement covers

Four elements not to omit: the subcontractor's obligation to carry their own liability insurance and provide proof, a clause requiring them to indemnify you for their own fault, confirmation that they are genuinely an independent contractor and not a disguised employee, and confidentiality rules if you share client information.

Watch out for reclassification as employment

A subcontractor working exclusively for you, on your schedule, with your tools, looks a lot like an employee to the authorities. Reclassification brings retroactive deductions and contributions. Validate this with an accountant before building your model on subcontracting.

Your obligations once incorporated

Annual updating declaration, a current minute book, a separate corporate tax return and resolutions recording major decisions.

Common questions from Sainte-Catherine entrepreneurs

My subcontractor has no insurance. Is that my problem? In practice, yes. If damage occurs and they are not covered, your business absorbs your client's claim.

Should I incorporate before subcontracting? Strongly recommended, since the business should sign both sides of the contractual chain.

Compare your options in REQ, platform or notary, or start your incorporation.