Members in good standing of a regulated profession whose governing body permits incorporation including most of the regulated health professions, lawyers, chartered professional accountants, registered social workers, veterinarians, architects, and engineers, among others. Each college has its own conditions, and confirming eligibility with the relevant college is the first step on any new engagement.
No. A Professional Corporation does not limit a regulated professional’s personal liability for their own professional acts or omissions. That is the function of professional liability insurance, not corporate form. The corporation does limit exposure to commercial and employment liabilities of the practice itself, which is a real but distinct benefit.
There are two cost categories: setup and ongoing maintenance. Setup includes incorporation, the supporting corporate documents, and the application for the Certificate of Authorization with your college. Ongoing maintenance includes the annual corporate filings, the renewal of the Certificate of Authorization, and the legal-side updates to the minute book. Both are typically delivered on a fixed fee and are quoted in advance we are happy to share a current rate sheet on request rather than publish a number that drifts with the cost of living.
Sometimes. If your governing college permits family members to hold non-voting shares of the corporation, the corporation is technically capable of paying dividends to them. Whether those dividends will actually produce a tax-splitting benefit, however, depends on the federal TOSI rules introduced in 2018, which generally treat dividends to inactive family members as taxed at the top marginal rate. Some splitting opportunities remain within the TOSI framework, but they require a specific factual basis and careful documentation; we walk through that analysis at the formation stage and again whenever family circumstances change.
It can, indirectly, once the corporation has accumulated enough investment assets that its annual passive income exceeds the federal $50,000 threshold; the small business deduction on the active business income is reduced on a sliding scale at that point and is eliminated above $150,000 of passive income. The right response is structural rather than avoidance, and we coordinate with the client’s accountant to put the right structure in place when the portfolio approaches the threshold.
By doing the arithmetic. The numbers that matter are your professional income, your personal spending, the share of your income you can realistically retain inside the corporation, and your planning horizon. We run that calculation with prospective clients on the first call and recommend incorporation only when it pays for itself across a reasonable time frame. If it does not, we say so.
A Professional Corporation is a corporation created specifically for licensed professionals and governed by the rules of the relevant regulatory college in addition to the OBCA. A regular corporation can carry on any lawful business and is subject only to the OBCA or CBCA. Both access corporate tax rates, but only a PC can practise a regulated profession.
Yes. Most regulatory colleges require the PC's legal name to include the practitioner's surname and the words "Professional Corporation," and the college may restrict the use of descriptive or marketing terms. A separate trade name is sometimes permitted as a registered business name, but the legal corporate name must comply with the college's rules.
A Certificate of Authorization is a document issued by your regulatory college (for example, the CPSO for doctors or the LSO for lawyers) confirming the PC is authorized to practise the profession. You must obtain one before the PC can operate, and it must be renewed annually. Operating without a current certificate is a regulatory offence.
It depends on the profession. Doctors, dentists, and some other regulated colleges allow family members to hold non-voting shares, which can support income splitting and estate planning, subject to the Tax on Split Income (TOSI) rules. Other professions, including law and accounting, generally restrict share ownership to the licensed practitioner. The college's rules govern.
Generally no. Most Ontario regulatory colleges require PC shares to be held directly by the licensed practitioner and, where permitted, immediate family, not by a holding company. Some professions permit alternative structures, such as a separate holdco that owns rental real estate used by the PC, which can be reviewed on a case-by-case basis.
