What is a professional corporation?
A corporation is a separate legal entity. It can earn income, enter into contracts, purchase real estate, investments and other property, and pay taxes.
There are two main types of companies in Canada. A public company generally has its shares listed on a stock exchange and anyone can invest in it. A private company is not publicly traded. Public and private companies have different income tax and accounting rules.
A professional corporation is a type of private corporation governed by provincial legislation and the rules and regulations of each profession’s governing body. These rules often include restrictions on who can own shares in the company, what the company can own and do, and even on what the company can be named. A common provision is that a professional is not protected from legal liability for malpractice and negligence even though practicing through a corporation.
Posted in Architects, Business Professionals, Chiropractors, Dentists, Doctors, Engineers, Health Professionals, Incorporation, Lawyers, Medical Residents, Mortgage Brokers, Optometrists, Professional Corporation, Realtors, Uncategorized, Veterinarians
Tagged regulated health professions, separate legal entity
It’s a term that most business owners and professionals are familiar with. Almost everyone knows of someone who has incorporated, is thinking about it, has been told to do it, or wants nothing to do with it.
Over the years, I’ve heard so many comments and opinions on incorporation:
- I’m not sure why I’m doing this – it’s something my accountant told me to do.
- It’s too complicated and expensive.
- My friend told me she uses her company to write off her car, trips, house, etc.
- It’s great. I bought my cottage with the company.
- It’s a scam. In the end, you’ll get audited and be worse off.
- I’m still paying a lot of tax. I don’t think it’s worth it.
- Do I have to use a broker to buy and sell shares in my company?
I could go on and on…. Continue reading
Posted in Architects, Business Professionals, Chiropractors, Dentists, Doctors, Engineers, Health Professionals, Incorporation, Lawyers, Medical Residents, Mortgage Brokers, Optometrists, Professional Corporation, Realtors, Veterinarians
Tagged professional corporations
Incorporation is a term most physicians and other professionals are familiar with, but may not fully understand.
Almost every physician knows someone who has incorporated, is thinking about incorporation, or has been advised to incorporate.
But what is incorporation?
I recently answered these and other questions at an incorporation seminar for the Professional Association of Residents of British Columbia (PAR-BC).
I have included a link to the detailed notes from the session:
INCORPORATION FOR PHYSICIANS
After the summer I will be posting a series on incorporation for doctors, dentists, lawyers and other professionals. The above notes are a good starting point, but I’ll be exploring the issues in more depth in this blog.
If you have any questions, please contact me. You may also want to consider joining the Tax and Financial Planning for Medical Residents and New Doctors (Canada) or Tax and Financial Planning for Doctors (Canada) discussion groups on LinkedIn. The groups are open to all medical residents and physicians and provide the opportunity to ask financial questions and share your experiences with others.
It’s tax time, and I’ve been getting lots of questions from doctors about their T4A slips.
Each year the British Columbia Medical Association (BCMA) issues T4A slips to physicians who have participated in the benefit programs administered by the BCMA.
These benefit programs include:
The T4A will show an amount in Box 28 – Other Income which you must report in your personal income tax return. The reverse side of the T4A has a breakdown of the amounts reported for each program that you participated in.
The T4A slip can be reported in two ways. Continue reading
Debt is an issue faced by most at some point – governments, businesses and individuals including, of course, medical students and residents.
Becoming a doctor is an expensive venture, but it is an investment in yourself which will pay you many times over in the future.
Each resident is in a different situation. Some may have completed medical school with little or no debt. But for those with debt, the question is how best to manage it through residency and beyond. Some will reduce their debt during residency while others will maintain or even increase it.
The Contributory Professional Savings Plan (CPRSP) helps fund retirement for BC physicians by funding Registered Retirement Savings Plan (RRSP) and Individual Pension Plan (IPP) contributions. Proof of matching physician contributions to an RRSP or IPP is required before the benefit will be paid.
I recently learned that a physician’s contribution to a Registered Pension Plan (RPP) also qualifies as a matching contribution.
I have a confession. I don’t know much about programming. Why would I? I’m an accountant. I know about spreadsheets and taxes and financial planning. Not programming.
Thanks to Microsoft Office Web Apps, I don’t need to be a programmer. I can use spreadsheets that I created in Excel right on my web pages. Continue reading
Back in November, I presented a workshop to the Professional Association of Residents of British Columbia (PAR-BC) on transitioning from residency to practice. With the final year of residency coming to a close in June for many, how to prepare for practice is a trending topic.
I have attached a pdf copy of the detailed workshop notes here:
Transition to Medical Practice
The workshop covered a diverse range of topics including registration issues, remuneration options, income tax and accounting issues, incorporation, and basic financial planning. I will be covering incorporation for doctors in another presentation in June, and will be doing a series of posts on The Professional Edge on incorporation for doctors, dentists and other health professionals. Continue reading
Both the Contributory Retirement Savings Plan (CPRSP) and the Continuing Medical Education (CME) fund give you three years to claim your entitlement. The deadline for claiming entitlements from 2009 is March 31, 2012.
If the application is not received by the BCMA by the close of business on the deadline day, the benefit entitlement for 2009 will be lost. Continue reading
I recently finished a series of posts on the negotiated benefits that are available to BC physicians, and have been working on a new series about professional incorporation. Actually, it’s more like I am trying to work on a new series. I’m finding it hard not to keep looking at my emails each time a new one comes in. I usually go through them at the end of the day, but I still get a notification each time I receive a new one. It’s that nice little semi-transparent box that pops up for a few seconds telling you who the message is from and what it’s about. The one that’s tough to ignore. The one that’s letting me know I have yet another message about the CPRSP and RRSP contributions.
The deadline to make an RRSP contribution for a deduction on your 2011 personal income tax return is February 29, 2012. However, the deadline to submit your claim for a CPRSP payment to be deposited to your RRSP by February 29 is January 23, 2012. The BCMA will still review and process claims received after January 23, but cannot guarantee that the CPRSP payment will be available as an RRSP deduction for 2011.
The British Columbia Medical Association (BCMA) administers five major benefit programs that are available to practicing BC physicians and surgeons. This is the final post in a series describing the various benefit programs. In previous posts I have discussed the Continuing Medical Education (CME) benefit , the Contributory Professional Retirement Savings Plan (CPRSP), the Canadian Medical Protective Association (CMPA) rebate and the Physician’s Disability Insurance (PDI) program.
Many working Canadians are eligible to receive Maternity and Parental Benefits through Employment Insurance (EI). However, most physicians are unable to access EI as they are considered self-employed and EI exempt.
The British Columbia Medical Association (BCMA) administers five major benefit programs that are available to practicing BC physicians and surgeons. This post is the fourth in a series of five describing the various benefit programs. In previous posts I have discussed the Continuing Medical Education (CME) benefit , the Contributory Professional Retirement Savings Plan (CPRSP) and the Canadian Medical Protective Association (CMPA) rebate.
As its name suggests, the Physician’s Disability Insurance (PDI) Program provides disability insurance to qualifying BC physicians. The annual premium is paid by the provincial government and is considered personal income to the physician. Any payments received from a claim under the plan are not considered taxable.
With Christmas right around the corner, it seems appropriate to take a quick look at the taxation of employee gifts. Nobody is ever going to confuse Canada Revenue Agency (CRA) with Santa Clause, but at least CRA does provide some small relief from taxes on gifts.
Posted in Architects, Business Professionals, Businesses, Chiropractors, Dentists, Doctors, Engineers, Health Professionals, Income Tax, Lawyers, Mortgage Brokers, Optometrists, Realtors, Veterinarians
Tagged $500, Benefits, Canada Revenue Agency, CRA, Employees, Gifts
The British Columbia Medical Association (BCMA) administers five major benefit programs that are available to practicing BC physicians and surgeons. This post is the third in a series of five describing the various benefit programs. In previous posts I have discussed the Continuing Medical Education (CME) benefit and the Contributory Professional Retirement Savings Plan (CPRSP).
Most Canadian physicians are members of the Canadian Medical Protective Association (CMPA), the non-profit organization that provides assistance with malpractice issues. Membership dues are based on the physician’s type of practice. BC doctors are eligible to receive a partial rebate of their CMPA dues.