Incorporating for Professionals
From a tax perspective a PC is treated like any other corporation meaning many of the same planning opportunities are available. In fact, where a professional corporation loses its status it remains a corporation, only without the restrictions. The list of professionals eligible to incorporate generally includes accountants, lawyers, physicians, dentists, and veterinarians, among others. Professionals are regulated provincially by their professional governing body and as such the ability to incorporate and the rules associated with incorporating varies from province to province. These rules typically cover the types of services which may be provided and restrict the ownership of shares. A majority of the provinces restrict share ownership based upon the class of share with voting shares typically restricted to the professional and non-voting shares available to the professional and their immediate family members, i.e. spouse, children, or a trust in favour of minor children. The ability to offer multiple classes of shares to family members opens up a number of planning opportunities including income splitting and maximizing the lifetime capital gains exemption.