For many dentists in Ontario, the allure of incorporation stems from its potential tax benefits, structured financial management, and liability segregation. However, when a dentist in Ontario contemplates incorporation, there’s a unique set of rules and standards set out by the Royal College of Dental Surgeons of Ontario (RCDSO) that need adherence.
This guide seeks to illuminate the path for dentists aiming to incorporate, focusing on the rules specified by the College.
1. Understanding Professional Corporation (PC) for Dentists:
- Dentists in Ontario can’t incorporate under a general business corporation. They must establish a Professional Corporation that is subject to rules dictated by both the Ontario Business Corporations Act (OBCA) and the RCDSO.
2. Nomenclature Rules for Dental PCs:
- The RCDSO has strict naming conventions for dental professional corporations. The typical format comprises the dentist’s name, followed by “Professional Corporation” and an indication of the dental services rendered (e.g., “Dr. John Smith Dentistry Professional Corporation”).
3. Certificate of Authorization:
- An essential prerequisite to operating a dental PC in Ontario is procuring a Certificate of Authorization from the RCDSO. This certificate stands as a testament that the corporation adheres to the stipulated guidelines.
4. Stakeholders in the Professional Corporation:
- Only members of the RCDSO can hold, directly or indirectly, any shares in a dental PC.
- Similarly, every director or officer of the corporation should be a shareholder.
5. Upholding the Professional Corporation:
- The Certificate of Authorization has to be renewed annually.
- Any amendments to the PC, including changes in name, address, or shareholders, must be timely reported to the RCDSO.
6. Constraints of a Dental Professional Corporation:
- Despite its advantages, there are specific limitations of a dental PC:
- It doesn’t exempt a dentist from professional liability. Retaining professional liability insurance is still vital.
- The dental PC can only engage in the practice of dentistry and associated activities.
7. Financial Aspects and Taxation:
- A dental PC can avail certain tax benefits, like reduced corporate tax rates on retained earnings. Income splitting can also be an avenue for potential savings. It’s imperative, however, to engage with a tax expert to navigate and optimize these benefits.
The Road to Incorporation: Paved with Regulations
Incorporation for dentists in Ontario, while beneficial, is hedged with regulatory obligations to uphold the esteemed standards of the dental profession and safeguard public interest.
If you’re a dentist contemplating the intricacies of incorporation and the encompassing business registration process in Ontario, remember: informed decisions are best made with expert insights.
At Falcon Law PC, we specialize in guiding dental professionals through the nuanced landscape of incorporation, ensuring compliance with every RCDSO rule. To embark on your incorporation journey with seasoned legal experts by your side, reach out to us at 1-877-892-7778 or email info@falconlawyers.ca.
