Ontario Professional Corporation: Everything You Need to Know
If you’re a licensed professional in Ontario—whether a doctor, lawyer, accountant, or architect—you may have heard of the term Professional Corporation (PC). But what exactly does it mean to incorporate a professional corporation in Ontario, and how does it differ from a regular corporation? What does incorporating a professional corporation in Ontario mean, exactly, and how is it really different from a regular corporation? This guide goes in-depth into the setup of a professional corporation in Ontario, its benefits, and major considerations.
Whether it be starting a professional corporation in Ontario or managing an ongoing one, this extended blog will detail everything you may want to learn about the registration, continuation, and dissolution of a professional corporation in Ontario.
What is a Professional Corporation in Ontario?
A professional corporation in Ontario is a specific corporate vehicle tailored for licensed professionals, including physicians, lawyers, accountants, and other regulated professions. Although it functions in many ways like any other corporation, because of the nature of the services provided by a professional corporation, different rules and regulations apply to it.
Professional corporations in Ontario provide a means whereby an individual can offer their services, enjoying certain tax benefits accruing to a corporation, yet remaining liable in person for acts of professional misconduct or negligence.
Key traits of a Professional Corporation in Ontario include:
- A professional corporation may be formed only by licensed professionals.
- Shareholders, too, must be licensed in the particular profession.
- It is important to note that professional liability cannot be escaped by incorporation, and personal responsibility remains for professional errors.
Establishing an Ontario Professional Corporation
Some of the legal and regulatory processes that one must follow while setting up a professional corporation in Ontario are provided by the said Ontario professional corporations. No other business can be compared to this because it will need approvals from a governing professional body and the Ontario Business Registry.
How to Set Up a Professional Corporation in Ontario:
1. Apply to the governing body for a certificate: The first step is to receive approval from your profession’s regulatory body (e.g., the Ontario College of Physicians and Surgeons, Law Society of Ontario). The governing body will assess whether your proposed corporation meets the professional standards.
2. Choose a Corporate Name: The name of your Ontario professional corporation must be formed in accordance with requirements and include certain phrases, such as the phrase “Professional Corporation” or “P.C.,” which would identify it as a professional corporation. Be sure to select a name that is acceptable to the Ontario Business Registry. An Ontario NUANS Reservation Report is required to register a Named Corporation. You can obtain one through this trusted service provider. More about NUANS Report you can learn from this blog.
Choosing the Right Corporate Name with OBR
A name that will distinguish your professional corporation in Ontario, which will have to be approved by the OBR, ensures your professional corporation name is unique and to industry standards.
3. Articles of Incorporation: Go ahead and file the Articles of Incorporation with the Ontario government, stating the business and how it is structured. You will have to specify that you’re going to register a professional corporation in Ontario because this is the specific paperwork requiring specific approval. Online Business Registry can file and email the articles in just 2 business hours! Incorporate professional corporations in Ontario hassle-free.
4. Creation of by-laws and setting up internal policy: Once incorporation is performed, you have to establish internal policies and by-laws of the corporation, describing how it functions and what structure it possesses.
5. Obtain Licenses and Certificates: Along with incorporation, you will need to get the licenses and certificates from your regulatory body so that you can practice legally having a professional corporation.
6. Register Professional Corporation in Ontario: For the final step, you will need to go online through the OBR platform and register your professional corporation in Ontario. Conclusion: It legalizes the standing of your business as a Professional Corporation.
Professional Incorporation Help Section
- Advantages and Disadvantages of Incorporation
- Choosing a Corporate Name
- Establishing an Ontario Professional Corporation
- Professional Colleges and Governing Body Links
- What is Ontario Professional Incorporation?
- How Long Does it Take to Complete an Ontario Professional Incorporation?
- What is a Nuans Report?
What Types of Documents Are Required for Ontario Professional Corporations?
When registering a professional corporation in Ontario, the following documents are typically required:
- Articles of Incorporation.
- Name approval from the OBR.
- License approval from your professional regulatory body.
- Shareholder agreements, particularly if there are multiple professionals involved.
- Corporate bylaws outlining internal management.
Why Choose an Online Business Registry (OBR)?
The use of the Online Business Registry, also known as OBR, for professionals looking to incorporate professional corporation in Ontario provides huge advantages. It simplifies not only the initial registration process itself but also the ongoing management of compliance.
Benefits of Using OBR for the Incorporation of Professional Corporations in Ontario:
- Time efficiency: With the OBR, you can quickly apply for professional incorporation in Ontario online rather than manually on paper, which could cause delays in the process.
- Cost Economies: Online registration of a professional corporation in Ontario is typically less expensive, since it minimizes the need for a lawyer to consult on and prepare the documents.
- Simplified Compliance: OBR will remind you about the filing of annual returns and support your continued compliance with prevailing regulations.
Tax and Liability Benefits of a Professional Corporation in Ontario
Save on taxes: A properly set up professional corporation in Ontario will enable a professional to save on taxes by paying lower corporate taxes on the retained earnings, allowing them to save on personal income taxes by not withdrawing the profits.
Nevertheless, besides the fact that personal liability for professional negligence cannot be escaped, professional corporations can offer other forms of limited liability protection, especially when it relates to business debts and obligations.
How to Dissolve a Professional Corporation in Ontario
If you decide that you no longer wish to practice in a professional corporation, you must formally dissolve the corporation. Dissolution involves:
- Liquidation of Liabilities: All sums owed by the corporation, including all taxes and other government liabilities, should be paid.
- Inform the Governing Body: Notify the relevant professional regulating body that the corporation is to be wound up.
- File Articles of Dissolution: Submit the necessary paperwork to legally dissolve the company with the Ontario Business Registry.
- Tax Filings: Prepare all final tax returns and settle any outstanding issues regarding taxes.
Online Business registry can help to dissolve your Professional corporation in Ontario.
Incorporate Professional Corporation in Ontario: Common FAQs
Can I Incorporate a Professional Corporation in Ontario Myself?
Yes, you may choose to incorporate a professional corporation yourself in Ontario. However, this can be cumbersome given the number of approvals that may be required, so it is typically less of a hassle and more accurate to hire a service for incorporating a professional corporation in Ontario.
How Long Does It Take to Start a Professional Corporation in Ontario?
If your documents are in order, one may set up a professional corporation quite quickly in Ontario, especially using the OBR platform. The timeline will vary depending on how fast your professional regulatory body approves it.
Can I Incorporate a Professional Corporation if I’m in a Partnership?
Yes, you can. However, all shareholders must be licensed in that particular profession. Professional corporations offer a more formalized way of working in a partnership, providing tax benefits and clear ownership stakes.
Does a lawyer or accountant have to be used to set up a professional corporation?
No, this is not necessary, but hiring professional services to incorporate a professional corporation in Ontario online can ensure everything is set up properly and meets legal requirements. Accountants and lawyers may also offer valuable tax and legal advice.
What If I Move to Another Province?
If you move out of Ontario but wish to continue operating your corporation, you’ll need to comply with the new province’s laws. This could involve dissolving your Ontario corporation and incorporating a new one in the new province, or maintaining multi-jurisdictional operations.
Conclusion: Is Incorporating a Professional Corporation in Ontario Right for You?
Thinking about starting a professional corporation in Ontario? You’re in for some great perks, like tax savings and a more organized way to run your business. But before you jump in, keep in mind that there are specific steps and rules you’ll need to follow to stay in line with provincial laws and your profession’s guidelines.
If you’re looking to get your professional corporation up and running, using the Online Business Registry (OBR) is a fantastic option. It makes the whole process easier and gives you handy tools to help manage your corporation.
Want to know more about how to incorporate an Ontario professional incorporation online? It’s a good idea to check out some professional advice or explore online platforms to register your professional corporation in Ontario online. You’ve got this!
