Professional Corporation Setup
Professional corporation setup usually gets treated as a legal task: articles of incorporation, a certificate of authorization, a lawyer’s afternoon of work. The legal side is real, but the decisions that determine whether incorporating was worth it — and how much it actually saves you — get made at setup, not afterward.
WHAT ACTUALLY HAPPENS WHEN YOU INCORPORATE
A professional corporation is a legal entity separate from you, governed by the Business Corporations Act and by the rules of your specific regulator — the two don’t always agree, and the regulator’s rules generally win. The lawyer handles the legal formation: articles of incorporation, a corporate minute book, and — for regulated professions — the certificate of authorization from your college.
What the legal side doesn’t cover is the tax structure sitting underneath it: your fiscal year-end, whether a holding company fits your situation, how you’ll pay yourself, and whether the corporation’s initial share structure supports the planning you’ll want to do later. Those decisions are cheap to get right at setup and expensive to unwind afterward.
THE DECISIONS THAT GET MADE AT SETUP — AND MATTER LATER
Fiscal year-end. Doesn’t have to be December 31. Choosing a non-calendar year-end can create planning flexibility, particularly around income timing in the corporation’s first partial year.
Share structure. The classes of shares issued at incorporation affect income splitting options, the eventual use of the lifetime capital gains exemption, and how cleanly a holding company can be layered in later if one becomes appropriate. A single class of common shares is simple and often wrong.
Holding company — now or later. Not every regulator permits a holding company to own shares of a professional corporation, and where it is permitted, setting one up at the same time as the operating corporation is usually cheaper than adding one after value has accumulated.
Salary vs. dividends, from the first year. The decision doesn’t need to be finalized before incorporation, but understanding the tradeoff before the first year-end changes how the corporation’s first year is planned.
Registration for HST/GST and payroll. Whether to register for HST/GST immediately, and whether the corporation will run payroll from year one, both have downstream administrative consequences that are easier to set up correctly than to retrofit.
WHAT WE HANDLE
- Reviewing whether incorporating makes sense for your numbers before you pay a lawyer to set anything up
- Coordinating with your lawyer on share structure and fiscal year-end from a tax perspective
- Advising on whether a holding company should be set up at the same time, based on your regulator’s rules and your situation
- Setting up the corporation’s bookkeeping and tax filing structure from day one
- The first year’s compensation planning — salary, dividends, or a mix — so the decision isn’t made by default
WORKING WITH US
You work directly with Robert Occhiuto, CPA, CA. Over 20 years in public accounting, including three years at BDO Canada — one of the world’s largest accounting networks — and CPA Canada’s In-Depth Tax certification, the specialist tax program most general accountants don’t complete.
We work alongside your lawyer, not instead of them. The lawyer handles the legal formation; we handle the tax structure that determines whether it was worth doing.
The first conversation is free, and if incorporating doesn’t make sense for your numbers yet, we’ll say so rather than set up a structure you don’t need.
Common questions
Is incorporating worth it for me? It depends on whether you consistently earn more than you spend. The core benefit is tax deferral on income left inside the corporation — valuable if you can leave it there, and largely pointless if you draw everything out to fund your lifestyle. We’ll model your actual numbers before you pay anyone to set anything up.
Can my accountant and lawyer coordinate on this, or do I manage that myself? That’s the normal arrangement — the lawyer handles the legal formation and the certificate of authorization where applicable, and we handle the tax structure. We work directly with your lawyer on share structure and year-end so the two sides agree before anything is filed.
Does my profession allow a holding company? It depends entirely on your regulator, and the rules differ by profession and change over time. This needs to be confirmed with your college in writing before any structure is built around the assumption that it’s allowed.
How long does setup take? The legal formation itself is typically handled by your lawyer in a matter of days to a few weeks, depending on your regulator’s certificate of authorization process. The tax-side planning — year-end, share structure, first-year compensation — is worth doing before incorporation is finalized, not after.
What does it cost? The legal formation is a separate cost from your lawyer. Our involvement depends on scope — a straightforward setup review is different from coordinating a holding company structure at the same time. We’ll give you a range in the first conversation.
THINKING ABOUT INCORPORATING??
Book a free consultation. We’ll run the numbers on your actual situation and tell you honestly whether incorporating is worth it — and if it is, how to set it up right the first time.