Professional incorporation in Quebec

Professional incorporation

A corporation like
any other, except
on four points.

Professional incorporation is for members of an order whose regulation allows practice through a corporation: physicians, dentists, accountants, engineers, lawyers, notaries, pharmacists, architects and several others. The resulting entity has a name of its own, the professional corporation, and it does not follow quite the same rules as an ordinary commercial company.

The mechanics of setting it up are the same: articles, a name, share capital, resolutions, a minute book. What changes comes down to four things. The name must satisfy your order’s rules on top of the registrar’s. The articles must carry schedules specific to your profession. Share ownership is restricted. And the corporation must be declared or registered with the order before you may practise through it.

Each order sets its own conditions by regulation, and they differ noticeably from one order to the next. So we never assume what your order requires: we read its regulation before the corporation is set up, because a single missing schedule is enough for registration to be refused afterwards.

One point worth stating at the outset: the corporation does not shield you from your professional liability. It frames your practice and it opens a tax deferral. It relieves you of nothing toward your clients, your patients or your order.

What we do

Build a corporation
your order will accept.

The preliminary check

Does your order allow practice through a corporation, and on what conditions? That question comes before all the others. We read the regulation of the order concerned and draw from it the list of what the corporation will have to include, rather than starting from a generic template.

Choosing the name

Orders often impose strict conditions on the name of a professional corporation, and the name must also comply with the Act respecting the legal publicity of enterprises. A mistake here means refusal by the registrar and a visual identity to redo.

Articles and schedules

On top of the usual articles of incorporation come schedules specific to your profession, notably on share ownership and board composition. If those provisions are absent, registration of the corporation with the order may be refused.

Declaring to the order

The corporation must then be declared or registered with the order, using the documents it prescribes. We prepare those documents, swear them where required, and hand you a corporation in good standing, ready to be registered.

Insurance and ongoing compliance

Orders require professional liability insurance coverage suited to practising through a corporation, and updates whenever the shareholders or the board change. We tell you what your order expects of you after incorporation, not only on the day of incorporation.

Organization and agreement

Resolutions, share issuance, registers and the minute book. And as soon as the corporation has more than one shareholder, a shareholder agreement dealing with withdrawal, death, non-competition and share buy-backs.

Frequently asked questions

What we are asked most.

Can every professional incorporate?

No. Practising through a corporation is open only to members of the orders that allow it, and each order sets its own conditions by regulation. Physicians, dentists, accountants, engineers, lawyers, notaries, pharmacists, architects and several other orders permit this form of practice, but the conditions are not the same from one order to the next. The first step is to confirm with your own order what its regulation requires, before the corporation is set up.

Does incorporating shield me from my professional liability?

No, and this is the most common misunderstanding. A professional corporation limits liability attached to the commercial commitments of the business, not the professional liability of the professional who performs the act. You remain personally liable for your professional acts toward your clients or patients, and you remain subject to your order’s discipline. That is precisely why orders require professional liability insurance coverage suited to practising through a corporation.

Who may hold shares in a professional corporation?

Ownership is not open. Orders generally govern who may hold shares, voting shares in particular, and who may sit on the board. Those restrictions have to appear in the schedules to the articles of incorporation. The detail varies from one order to the next and is confirmed in the regulation of the order concerned before the share capital is designed.

What changes compared with incorporating an ordinary business?

Four things: the corporate name must satisfy your order’s rules on top of the registrar’s, the articles must carry schedules specific to your profession, the corporation must be declared or registered with the order before you may practise through it, and share ownership is restricted. A well-executed ordinary incorporation is still an incorporation the order will refuse if those elements are missing.

Is incorporating worthwhile from a tax standpoint?

The main benefit is tax deferral. Professional income left in the corporation is taxed at corporate rates, and personal tax is paid only when you draw a salary or a dividend. The advantage is real when your income durably exceeds your personal needs, and much thinner when you withdraw everything you earn each year. The calculation is done with your accountant before you decide, not after.

To situate the step: incorporation and corporate structuring, on the regime and the share capital, the minute book, and the holding company, an underused tool for SMEs, on the ownership structure.

Does your order allow it?

One meeting is usually enough to establish what your order requires, how to structure ownership, and whether the tax deferral justifies the exercise in your case.

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Business & Corporate