Professional Corporations

If you are a lawyer, accountant, doctor, other health care professional (including dentist, chiropractor, physiotherapist, or optometrist), you may want to consider creating a Professional Corporation (a "PC").

A Professional Corporation is identical to any other Corporation, except that its voting shareholders must all be practicing members of the same Profession, and that its business  can be the "practice" in that Profession. As such, a Professional Corporation must obtain a license to practice from the governing society or college of the Profession.

The advantages to running your practice through a professional corporation are the same as any other business. You can immunize yourself from personal liability for debts of the Corporation, and you can take advantage of the special tax treatment of a Corporation.

If you are starting your own practice, a Professional Corporation is strongly recommended. Having your earnings taxed at a lower tax rate allows you to reinvest more into your business each year. Down the road, you can also take advantage of income splitting opportunities with your spouse, or with your children once they become adults.