If you are a health professional, you may be deciding whether you should register a health professional corporation or operate as a sole proprietor. While the answer to this is not black and white and will depend on your personal circumstances, in this article we will discuss some top considerations when deciding whether or not to register as a health professional corporation.
Here are some health professionals that are entitled to register as health professional corporations:
- Psychotherapist professional corporations.
- Physiotherapist professional corporations.
- Chiropractor professional corporations.
- Nurse professional corporations.
- Pharmacist professional corporations.
- Psychologist professional corporations.
- Registered therapist professional corporations.
- Occupational therapist professional corporations.
- Dentist professional corporations.
Registering as a health professional corporation may afford you with certain taxation benefits. We encourage you to speak with an accountant or tax specialist prior to registering a health professional corporation. To name a few, health professional corporations can take advantage of corporate tax benefits such as income splitting, income deferrals, and tax credits available to corporations. Such benefits may not be available to health professionals operating as sole proprietors. At Falcon Law PC, we work hand in hand with your accountant or tax specialist to advise you.
With a health professional corporation, you would be entitled to split your personal liability and business liability. This would mean that you would not be personal responsible for the business activities undertaken by your health professional corporation. For example, if you entered into a lease with your health professional corporation and were litigated against under this lease, you would not be required to respond to such litigation in your personal capacity. However, business liability should not be confused with professional liability. With all health professional corporations, you would remain personally responsible for your obligations to your profession and to your clientele.
Having a health professional corporation may assist you in the structuring of your business. For instance, if you sought to do business in conjunction with your colleagues who are also registrants in your respective college, and depending on if your college permits such organizations, you would be able to subscribe as shareholders to one collective health professional corporation. Overall, it may be easier with a health professional corporation to structure a partnership.
Some other things to consider when registering a health professional corporation:
- ·You are required to obtain a certificate of authorization from your respective college prior to commencing business under a health professional corporation.
- If permitted by your health college, the only other shareholders you may have in your health professional corporation are registrants of your college.
- In some circumstances, health professional corporations are permitted to include family members as shareholders solely for income splitting purposes.
- You may be required to renew your certificate of authorization on a yearly basis, which would entail form filling and fees.
- You would be required to maintain a minute book for your health professional corporation and comply with other corporate law regulations.
Falcon Law PC would be happy to advise you on your health professional corporation. Falcon Law PC offers free 15-minute consultation to all health professionals seeking to register as a health professional corporation. Click here for more information about our professional corporation services. Falcon Law PC assists health professional corporations with obtaining certificate of authorizations, initial and ongoing corporate management, corporate structuring for partnerships, and other legal advice.
By: Raz Toor, Lawyer
November 12, 2021