How to Incorporate Ontario Professional Corporation:

In Ontario, licensed professionals such as accountants, lawyers, and health practitioners, as well as other licensed professionals, have a unique opportunity to Register a professional business as a professional corporation. Only licensed professional have this opportunity. Ordinary individuals not allowed to incorporate Professional Corporation. They allowed to incorporate Standard Corporation.

In this blog post, we will show you the basic of what an Ontario Professional Corporation is, the benefits of incorporating an Ontario Professional Corporation, basic requirements for registering Professional Corporation. We also demonstrate the key differences between an Ontario Professional Corporation and a standard corporation.

Additionally, we will highlight how Business Ontario Corporate Service Inc. (official intermediaries of Service Ontario) can assist you in registering your Professional Corporation.

What is an Ontario Professional Corporation?

Ontario Professional Corporation is a business structure that is specifically designed for licensed Ontario professionals. This corporation combines both limited liability protection with governing professional body’s oversight.

In a sentence, it is a combination of security of a corporation while adhering to your profession’s regulations.

This means licensed Ontario professionals can practice with the security of a corporation. But still licensed professionals will be held accountable for their professional services, as dictated by their Authorised profession’s governing body.

Common professions that can incorporate as Professional Corporation in Ontario include:

• Chartered Professional Accountants (CPAs)
• Lawyers
• Engineers
• Doctors
• Dentists and so on

Benefits of Incorporating as an Ontario Professional Corporation

Professional Corporation have many advantages. A few are briefly described here:

Limited Liability: Professional Corporation (PC) limits your personal liability in Ontario. This means your house, car, and savings are generally protected from business debts and lawsuits. Shareholder or owner can protect personal assets from liability for business debts and lawsuits in a Professional Corporation.

Tax Advantages: CRA also gives some tax credit to Professional Corporation. For example: Tax credit to deduct certain business expenses in Tax return.  Professional income earned through a Professional Corporation may be subject to lower corporate tax rates compared to personal income tax rates.

Credibility: A Professional Corporation creates a professional image and inspires confidence in clients

Succession Planning: A professional corporation is registered as a Corporation (legal distinct entity) that simplifies the process of transferring ownership to another qualified professional in the future.

Requirements for Registering an Ontario Professional Corporation

The specific requirements for registering a PC can vary depending on your profession. However, some general steps are involved:

Obtain Approval: To incorporate a professional corporation, first of all You’ll need approval from your governing professional body.  This usually involves ensuring you meet specific practice experience and insurance requirements.

Choose a Name: Most cases Professional individual choose their own name for their Professional Corporation. If you are a lawyer, you may Choose “Mustafizur Rahman Law Professional Corporation”.

Usually, Ontario Professional Corporation name must use legal ending “Professional Corporation” or “Société Professionnelle” and comply with naming restrictions set by your professional body. Although some provinces allow people to choose different legal suffixes,.

File Incorporation Documents: Once you have approval, you’ll need to file incorporation documents. You can do it online through Business Ontario Corporate Services Inc.

Initial Return Filing: Filing Initial initial return is mandatory for all corporations, even for any Ontario Professional Corporation (PC).  This filing needs to be completed within 60 days of your incorporation date. Please keep in mind that it is not Tax Filing with CRA.

Maintain Compliance: There are some ongoing compliance requirements for Professional Corporation, such as Annual Return Filing and adhering to your professional body’s regulations.

Professional Corporation vs. Standard Corporation

Although, both corporations have limited liability protection, PCs are specifically for licensed professionals, while standard corporations can operate in any industry. there are some distinct differences between a Professional Corporation and a standard corporation:

Ownership Restrictions: Only a licensed professionals can own and operate a professional corporation within the same profession. A standard corporation has no restrictions on ownership. Anyone (individuals or legal entities) can own shares in the corporation. That means Individuals, other corporations or entities, can be Shareholders of standard corporations. 

Professional Regulations: Professional Corporations are governed by both Ontario Corporate law and regulations of specific regulated profession.  All Professional corporations must comply with professional standards and codes of conduct established by the designated regulatory body overseeing the profession. required to obtain a Certificate of Authorization from the relevant professional regulatory body.

Standard corporations have more operational freedom. It operates under general corporate (Ontario Business Act.) laws and regulations.

Purpose and Eligibility: Professional corporations are specifically for licensed professionals such as doctors, lawyers, accountants, architects, engineers, and veterinary medicine. Professionals who want to incorporate a Professional Corporation   must have  licensed or registered member with a designated regulatory body within their regulated profession. All shareholders, directors, and officers must be licensed in the specific profession.

In Standard corporation, No specific professional license is required to incorporate a Standard corporation. Any individual or group can register a standard corporation to conduct commercial activities,

Name Requirements: Professional corporations must have specific wording in their names such as Legal suffix must be “Professional corporation.””.

Standard corporations have more flexibility in naming. Standard corporation can choose any permitted name under the naming rules of business.

Why choose Business Ontario Corporate Services Inc.?

Business Ontario Corporate Services Inc. (Service Ontario’s official intermediary) offers a range of services to streamline your Ontario Professional Corporation registration:

• Business Ontario Corporate Services Inc. is an official intermediary for Service Ontario.
• We are registered member of Corporations Canada and NUANS
• We can guide you through the incorporation process, ensuring your Articles of Incorporation are accurate and meet all legal requirements.
• We offer ongoing support and resources to help you navigate the complexities of business ownership in Ontario.
• By leveraging our expertise, you can save valuable time and ensure a smooth registration process for your Ontario Professional Corporation. You can focus on what matters most: building a thriving professional practice.

Disclaimer:

Remember, this blog post provides a general overview.  For specific details and regulations regarding your profession, it’s vital to consult with your governing professional body.  With careful planning and the right resources, incorporating as an Ontario Professional Corporation can empower you to take your practice to new heights.