Incorporation For Dentists - Professional Medical Corporation
A STRONG LEGAL FOUNDATION FOR YOUR PRACTICE
As a dentist, maintaining a successful and sustainable practice requires careful financial and legal planning. Incorporating your dental practice can be an important step in strengthening the long-term stability of your business. A professional dental corporation can provide valuable advantages that support the continued success of your practice.
The Benefits of Incorporation For Dentists
Dentists often earn high professional income, which can result in substantial personal tax obligations. Incorporating your dental practice can provide valuable tax planning opportunities by allowing income to be retained within the corporation and taxed at lower corporate rates. This structure can make it easier to manage cash flow, reinvest in your clinic, and work toward long-term financial goals such as purchasing a home, expanding your practice, or planning for retirement. Operating through a professional corporation can also strengthen your financial position when seeking loans or financing for equipment, renovations, or additional locations.
Is Incorporation Right for Your Dental Practice?
Deciding whether to incorporate your dental practice requires considering both the benefits and the responsibilities that come with operating through a professional corporation. While incorporation can offer meaningful tax planning opportunities and financial flexibility, it also involves additional costs, regulatory requirements, and ongoing administrative obligations.
Managing a corporation on your own can quickly become complex. In addition to running your dental practice, you would be responsible for maintaining corporate records, meeting regulatory requirements, and filing a separate corporate tax return alongside your personal return. Because of these complexities, many dentists choose to work with accountants who have experience handling dental professional corporation filings.
Parr Business Law can assist with the setup and ongoing maintenance of your professional corporation. Our team can manage annual corporate filings, coordinate with the College of Dental Surgeons of British Columbia (CDSBC), and help ensure your corporation remains compliant while minimizing the administrative burden on you.
7 Steps to Incorporate as a Dentist
1
Research and Consultation:
Start by learning about the requirements and benefits of incorporating a dental practice in BC. Speaking with both a lawyer and an accountant can help you determine whether incorporation aligns with your financial goals, practice structure, and long-term plans.
2
Choose a Corporate Name:
Your professional dental corporation must follow specific naming rules set by the regulator. Typically, the name includes the dentist’s name and identifies the entity as a professional corporation that provides dental services.
3
Secure CDSBC Consent and Settle Fees:
Before incorporation can proceed, you must obtain consent from CDSBC for the proposed corporation. This step involves submitting the required application and paying the applicable regulatory fees.
4
Engage Legal Assistance:
A lawyer experienced in professional incorporations can help ensure the corporation is structured properly and complies with both provincial law and dental regulatory requirements. Legal guidance can also simplify the process and prevent costly mistakes.
5
Prepare Incorporation Documents:
Your legal team will prepare the necessary documents, including the Articles of Incorporation, share structure, and corporate records required to establish the professional dental corporation.
6
Submit to the BC Registrar:
Once the documents are prepared, the incorporation application is filed with the BC Corporate Registry. This filing officially creates the corporation under provincial law.
7
Get Approval:
After incorporation, the corporation must receive final approval from CDSBC before it can operate as a professional dental corporation. Once approval is granted, your corporation can begin operating in compliance with the College’s regulations.
Aspects to Consider Following Incorporation Approval
After the incorporation process is complete, there might be several aspects you want to address regarding your corporation. One of the first steps often involves setting up a corporate bank account. If this applies to you, you will also want to allocate shares and make sure to organize these critical documents for your corporation's records. Your lawyer can assist with all of these steps. Additionally you’ll receive a CRA Business Number upon incorporating your Company to open up a MyCRA Business Account.
To stay in good standing, compliance with the College of Physicians and Surgeons of British Columbia (CPSBC) is crucial. This includes regular reporting and meeting any other post-incorporation responsibilities. Physicians must adhere to ongoing professional development mandates and ensure timely renewals of both their practice license and corporation status.
If you would like assistance with any incorporation-related documents following incorporation, we are able to provide guidance.
FAQs
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Without incorporation, all income from your dental practice is typically taxed as personal income, which can result in a higher overall tax burden as your earnings grow. Dentists who do not incorporate may also have fewer options when it comes to income deferral, structured compensation, and long-term tax planning.
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Dentists who currently operate as sole practitioners or in partnership with other dentists will often need to work with their accountant or tax advisor to transition their existing practice into the new professional corporation. This may involve transferring business assets, equipment, and goodwill into the corporation. In many cases, a Section 85 rollover (a tax-deferred transfer of property into a corporation) may be used, along with transferring leases, contracts, and other legal obligations from the individual practitioner to the corporation.
Our team will help ensure your corporate name complies with the regulatory requirements for dental corporations and prepare the necessary application for a professional corporation permit from CDSBC. Once consent is obtained and the required documentation is prepared, we will complete the incorporation and guide you through the final approval process so your professional dental corporation can begin operating.
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In most cases, the process takes a few weeks from start to finish. This includes obtaining consent from CDSBC, preparing and filing the incorporation documents, and receiving final approval to operate as a professional dental corporation.
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To operate through a professional dental corporation in BC, you must be a licensed dentist in good standing with the CDSBC.
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You are not legally required to use a lawyer to incorporate a dental practice in BC. However, the process involves legal documentation, regulatory approval, and ongoing corporate compliance. A business lawyer understands professional incorporations and ensures the corporation is set up correctly and meets all requirements from both the BC Corporate Registry and CDSBC.
Need Advice on Incorporating Your Medical Practice?
When it’s time to incorporate your Canadian medical practice, Parr Business Law can help you navigate the incorporation process with confidence and clarity. Our lawyers have the specialized knowledge to provide you with reliable and candid legal advice so you can protect your personal assets and build wealth faster. Schedule a consultation call with us today to learn more.