Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only. If you need legal advice with respect to setting up a dental, health, or legal professional corporation, you should seek professional assistance (e.g. make a post on Dynamic Lawyers). We have Toronto, Ottawa, Hamilton, Mississauga, Brampton, and other Ontario business lawyers registered on the website who can answer your questions or help you with your professional corporation. I should know – I’m one of them and you can contact me directly (michael@carabashlaw.com).
So you are a dentist and you want to have a professional corporation for tax purposes. Here’s the general process:
- Under the Regulated Health Professions Act, 1991, no corporation shall hold itself out as a health profession corporation unless it holds a valid certificate of authorization: s. 34.1(1).
- Schedule 2 of that Act discusses Health Profession Corporations (ss. 85.8 through to 85.14).
- Subject to the regulations made the Act and the by-laws, one or more members of the same health profession may establish a health profession corporation for the purposes of practising their health profession: s. 85.8(1).
- The Certificates of Authorization (Ontario Regulation 39/02) are made under the Act.
- You will need to have a corporation BEFORE you can have a health profession corporation. In other words, a health profession corporation is simply a corporation holding a certificate of authorization. So the corporation will need to be registered under the Canada Business Corporations Act or the Ontario Business Corporations Act. To register a corporation, you should have a lawyer prepare the articles of incorporation, the by-laws, director and shareholder resolution and meeting minutes, director and shareholder registry, etc. A lawyer may also be needed to create a special class of shares for certain family members (for income-splitting purposes).
- If you would like a lawyer to fill out the Certificate of Authorization, lawyers would charge extra for their time and it would also cost $750 in fees to the Royal College of Dental Surgeons of Ontario.
- Depending on the name you choose for your professional corporation, the normal time frame to incorporate is between 1-3 business days. If there are issues with the name you’ve selected, it could take longer.
FYI, you might want to consider getting a memo from a lawyer on the tax advantages/potential traps of having a dental professional corporation. There are many things that you should be aware of (e.g. income splitting, loans, attribution rules, etc.). The way I see it, if you’re going so far as to spend $2,500 to $3,000 incorporating (which includes getting a certificate of authorization), you should spend a bit extra to find out what you can legally do with a corporation with respect to taxes.
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