If you’re a doctor, dentist, lawyer, CPA, physio or another licensed professional earning good money as a sole proprietor, you’ve probably heard someone say “you should incorporate.” Maybe they’re right. But a professional corporation has extra rules a regular company doesn’t, and they differ by profession. Here’s how it works in BC, without the legal fog.
On this page
- Can Your Profession Incorporate in BC?
- What a Professional Corporation Is
- Professions Allowed to Incorporate in BC
- Ownership Rules: Who Can Hold Voting and Non-Voting Shares
- Naming Rules and Regulator Permits
- Tax Benefits: Small Business Deduction, Tax Deferral and Retirement Options
- The Limits: Personal Liability, TOSI and Passive Income Rules
- Costs to Set Up and Run a Professional Corporation in BC
- How to Incorporate Your Practice in BC: Step by Step
- When Incorporating Your Practice Doesn’t Make Sense
- FAQ: Professional Corporations in BC
- Book a Professional Corporation Consultation
Can Your Profession Incorporate in BC?
Most regulated professions in BC can practise through a corporation, including doctors, dentists, pharmacists and other health professionals under the Health Professions Act, lawyers, CPAs, architects and engineers. Each needs approval or a permit from its regulator, and most require that voting shares be held only by licensed members. You still stay personally liable for your professional work.
The rules come from two places: BC corporate law and your regulator’s bylaws. Always check your college or society’s current rules before you file.
What a Professional Corporation Is
A professional corporation is a regular BC company with extra conditions. It’s still a CCPC, so it gets the small business tax rate, but:
- Your regulator must approve it (usually through a permit)
- Share ownership is restricted
- Its name must follow the regulator’s rules
- It can only carry on the profession (plus related activities and investing surplus funds)
Professions Allowed to Incorporate in BC
| Profession | Regulator | Key rule to know |
| Physicians and surgeons | College of Physicians and Surgeons of BC | Health profession corporation permit, family may hold non-voting shares |
| Dentists | College of Oral Health Professionals | Health profession corporation permit |
| Pharmacists, physios, chiropractors, optometrists, RMTs, naturopaths and others | Their college under the Health Professions Act | Permit required, rules vary by college |
| Lawyers | Law Society of BC | Law corporation permit, voting shares held by lawyers |
| CPAs | CPABC | Professional corporation registration with CPABC |
| Architects | AIBC | Corporate rules set by AIBC |
| Engineers and geoscientists | Engineers and Geoscientists BC | Firm needs a permit to practise |
If your profession isn’t listed, you may still be able to use a regular company. For example, many IT consultants and designers simply incorporate normally. (If that’s you, read about the personal services business trap first.)
Ownership Rules: Who Can Hold Voting and Non-Voting Shares
This is the part that drives the tax planning.
- Voting shares: almost always only licensed members of the profession.
- Non-voting shares: many BC health colleges and some other regulators allow family members (like a spouse or adult children) or a family trust to hold them. Lawyers have their own Law Society rules.
- Directors and officers: usually must be licensed members.
Family shareholders don’t automatically mean income splitting, though. The TOSI rules limit dividends to family members who aren’t actively involved, with key exceptions such as a spouse once you turn 65.
Naming Rules and Regulator Permits
- Most regulators require the name to identify the profession or the member, and approve it before you incorporate.
- You’ll apply to BC Registries for the company, then to your regulator for the permit, or in the order your regulator requires.
- You usually can’t practise through the company until the permit is issued, so don’t switch your billing over early.
Tax Benefits: Small Business Deduction, Tax Deferral and Retirement Options
| Benefit | What it means for you |
| Small business tax rate | About 11% combined federal and BC on the first $500,000 of active income, versus up to 53.5% personally |
| Tax deferral | Leave what you don’t need in the company and invest it |
| Flexible pay | Mix of salary and dividends |
| Retirement tools | Access to an individual pension plan (IPP) and a health spending account as an employee |
| Lifetime planning | Estate freezes and family trusts later on |
More detail on the rate: small business deduction and corporate tax rates.
The Limits: Personal Liability, TOSI and Passive Income Rules
- Liability: a corporation does not protect you from your own malpractice. It can protect you from some business debts like leases.
- TOSI: income splitting is much more limited than it was before 2018.
- Passive income: once the company earns more than $50,000 of investment income a year, your small business limit starts shrinking. See passive income in a CCPC.
- Billing: some public payors need to be updated to pay the corporation. Doctors in BC, for example, need MSP billing set up for the corporation.
Costs to Set Up and Run a Professional Corporation in BC
| Cost | Typical range |
| BC incorporation and name filing | About $380 in government fees |
| Regulator permit and annual renewal | Varies by profession, often a few hundred dollars |
| Legal setup (articles, share structure) | $1,000–$3,000+ |
| Annual accounting and T2 return | Often $2,000–$5,000+ depending on complexity |
| Annual report and minute book | Small annual fees |
How to Incorporate Your Practice in BC: Step by Step
- Check with an accountant that the numbers make sense (more on that below).
- Read your regulator’s incorporation bylaws and forms.
- Reserve a compliant name.
- Incorporate with BC Registries, using articles that meet regulator rules.
- Apply for and receive your regulator permit.
- Open a corporate bank account and register for a CRA business number and payroll account.
- Update billing (MSP, insurers, clients), contracts and insurance.
- Start paying yourself properly through salary and/or dividends.
When Incorporating Your Practice Doesn’t Make Sense
- You spend everything you earn each year (no money to leave in the company)
- Your net income is fairly low
- You’re close to retirement with little time to benefit
- Your regulator’s ownership rules make your planning goals impossible
A good rule of thumb: if you can leave $50,000 or more a year in the company, it’s usually worth a serious look. See our detailed guides for doctors and dentists.
FAQ: Professional Corporations in BC
Can my spouse or children own shares?
Often non-voting shares, depending on your regulator. TOSI rules still decide how dividends to them are taxed.
Is a professional corporation the same as an LLC?
No. LLCs are American. In BC you use a regular company with professional rules on top.
Does a professional corporation protect me from malpractice claims?
No. You remain personally liable for your professional work. That’s what your professional liability insurance is for.
How much should I earn before incorporating?
It’s less about income and more about what you can leave in the company. If you need every dollar to live on, the benefit is small.
Can a professional corporation invest surplus funds?
Yes, most regulators allow investing surplus, but watch the passive income rules.
What’s the biggest disadvantage?
Extra cost and admin every year, and the fact that the tax savings depend on keeping money in the company.
