INCORPORATING YOUR MEDICAL PRACTICE
Business incorporation lawyer assisting doctors / physicians incorporating their medical practice as a professional corporation in Alberta and Ontario.
Contact Neufeld Legal PC at 403-400-4092 / 905-616-8864 or Chris@NeufeldLegal.com
As a doctor / physician, advancing the business component of your medical career frequently involves incorporating one’s medical practice as a professional corporation. Provincial medical regulatory bodies, such as the College of Physicians and Surgeons of Ontario and the College of Physicians and Surgeons of Alberta, are empowered by their province’s Health Professions Act to permit the incorporation of dentists as a professional corporation.
The Health Professions Act provides that only a licensed member, a registered practitioner, or a professional corporation may engage in the practice of dentistry. All of the provisions of the Health Professions Act, the Regulations, and the Bylaws that are applicable to an individual registered member apply with equal force and with all necessary modifications to a professional corporation. The Health Professions Act does not permit there to be different rules depending on whether or not a doctor / physician practices individually or as a professional corporation.
Incorporating one’s medical practice as a professional corporation enables the physician to draw upon certain business and tax advantages that are available when operating one’s professional practice through a professional corporation. A professional corporation enables a doctor / physician to realize certain tax advantages attainable by traditional corporations, including:
(i) the small business deduction, with its preferential corporate tax rates and ability to defer taxes;
(ii) remuneration flexibility, allowing for a sufficient salary and appropriate tax planning / RRSP contributions;
(iii) the availability of the lifetime capital gains exemption for the owner of a qualifying corporation;
(iv) the potential for absolute tax savings from structuring the corporate payment of non-deductible or partly deductible expenses;
(v) achieving separation from one’s personal finances, allowing for corporate borrowing, tax-deductible interest payments, and preferential debt management arrangements;
(vi) optimizing investments with retained earnings of the medical practice, which are subsequently ‘purified’ and flowed out on a tax-deferred basis to a personal holding company;
(vii) potential income splitting, although this is subject to increasingly stringent tax rules, together with restrictions on permissible shareholders; and
(viii) maximizing value from the sale of a medical practice, while minimizing the associated tax liability.
There is also the strategic availability of using a non-calendar year-end, as well as various advanced tax planning opportunities, such as individual pension plans, retirement compensation arrangements and corporate-owned life insurance solutions.
To realize these corporate tax advantages, the provincial legislatures and the physicians’ governing regulatory bodies agreed not to shield the doctors / physicians from liability arising from their professional malpractice and negligence, although doctors might have a degree of personal liability protection as to corporate business debts, payables and other financial obligations, although most significant debts and payment obligations contractually demand personal obligations from those individuals. Attempting to avoid (or otherwise limit) personal liability through the corporate construct of a professional corporation should not be an objective goal, as legal analysis and experience has demonstrated the vulnerability of doctors / physicians engaging in business through their professional corporation.
The professional corporation thus provides important corporate and tax benefits to most doctors as it relates to the management of their medical practice, such that most doctors / physicians need to consider the value of incorporating a professional corporation. Throughout this process, the importance of legal planning and experience cannot be understated, such that tackling the legal aspects of your medical business can greatly benefit from the involvement of knowledgeable legal counsel, which we have provided to doctors for over two decades.
When you incorporate a professional corporation with our law firm, you will benefit from the professional services of an experienced corporate lawyer who understands the importance of devising the appropriate corporate structure for your business operations, meeting the requirements of your profession's regulatory body, on a cost-effective basis - with flat rates* for the professional corporation (Alberta and Ontario). So if you are looking to incorporate a new professional corporation or deal with the corporate legalities impacting your company, contact us via email at Chris@NeufeldLegal.com or by telephone at 403-400-4092 [Alberta]; 905-616-8864 [Ontario].
| Alberta Professional Corporation - Incorporation Base Costs. A break-down of our base costs for an Alberta professional corporation, setting out our flat rate for incorporating a professional corporation (with professional regulatory body PC fees extra). Cost outline .... |
| Ontario Professional Corporation - Incorporation Base Costs. A break-down of our base costs for an Ontario professional corporation, setting out our flat rate for incorporating a professional corporation (with professional regulatory body PC fees extra). Cost outline .... |
* Please note that the flat rates associated with a standard incorporation are strictly limited to a basic incorporation (federal, Ontario, Alberta) and does not involve other matters that might be corrollary to the incorporation process or might be atypical for a standard incorporation, including but not limited to related legal or tax advice, engagement with other governmental bodies or professional bodies, licensing, drafting of pertinent business contracts (i.e., shareholders' agreements), negotiations, disputes, financing, coordination with other companies or other legal structuring.
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