Incorporation For Notary Publics

A LEGAL BUSINESS IS A HEALTHY BUSINESS

As a Notary Public, it’s important to give clients a sense of confidence in your company’s professional image, while ensuring your business stays healthy and profitable. When it’s time to take your practice to the next level, incorporating can help you gain access to a wealth of benefits to ensure you hit your career goals.

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The Benefits of Incorporation For Notary Publics

Notary Publics can easily earn an annual salary that is well into the 6 figures. However, after their annual tax bill, they will have nearly 30%-40% less in their pockets. Incorporation can help reduce your overall tax bill, as well as open up opportunities for income splitting, tax deferral, and effective estate planning.

The highest combined marginal tax bracket for individuals who reside in BC is 53.5%, whereby any income earned over $252,752 will be subject to this tax rate. The combined corporate tax rate for a BC company is 27%. This is already a huge savings, but if the company qualifies for the small business deduction, it will only be taxed 11% on its first $500,000 of income.

Notary Publics that are employees or operating as a sole proprietorship are subject to personal tax rates. By simply incorporating your practice, you can reach tax savings of hundreds of thousands of dollars throughout your lifetime. There are more tax strategies that are available through incorporation, such as holding companies, the lifetime capital gains exemption, and estate freezes. Be sure to seek guidance from legal and tax experts to ensure you stay compliant with tax laws.

Further benefits to incorporating include limited liability and professional credibility. Incorporation can protect personal assets by limiting liability to the corporation. An incorporated practice may add a feeling of confidence and credibility to clients and other professionals.

What Is The Process of Becoming A Notary Public

To practice as a Notary Public in BC, you must be a member of the Society of Notaries Public of British Columbia. To become a member, you are required to complete the Notary Education Program offered and facilitated by the Society. The education includes mentorship, in person and online classes, skills assessments and statutory admission exams.

When you apply to the Notary Education program, you must provide the following documents: A statement of personal assets and liabilities, resume of employment history, biography & statement of intent, three letters of reference, a Notary reference or referral, unofficial transcript, registration form & application fee, and any other documents as required by the Society.

Once you become a member of the Society, you can now look at incorporating. We advise consulting with a professional to ensure that you’ve covered all of the important details, including preparing a proper corporate minute book.

Post Incorporation Considerations

It is important to begin tax planning as early as possible. For example, you may want to start income splitting right away, to reduce your family’s overall tax bill from year 1. This requires careful planning to ensure you are compliant with the Tax on Split Income rules in Canada.

You may also want to set up a corporate bank account which can simplify bookkeeping, streamline the tax filing process, and provide better access to loans and credit.

The CRA will send you a Business Number which you’ll use to open up a MyCRA Business Account. Your lawyer can assist you with all of the post incorporation actions.

FAQs

Unincorporated Notary Publics will face a higher tax liability and may find that their options for credit and financing are limited.
Absolutely; however, self-managing your corporation can be complicated and time-consuming. You will have more administrative work to handle, including additional income tax return filings and annual reports. We recommend that you work with a team of trusted professionals including a lawyer and an accountant who can help you manage these additional complexities.
Established Notary Publics can be incorporated in as little as 1 week. For individuals wishing to become a Notary Public, the Notary Education Program is 18 months long.

Ready To Incorporate As A Notary Public?

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When it’s time to incorporate as a Notary Public in BC, 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 save on taxes and create professional credibility in your business. Schedule a consultation call with us today to learn more.