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1. What is a Medical Professional Corporation?
The Health Professions Act (British Columbia) gives the relative College the authority to issue a permit to a qualified health profession association to operate as a medical professional corporation in British Columbia. Eligible medical professionals in BC include chiropractors, dentists, optometrists, medical specialists like radiologists or anesthesiologists, and medical doctors.
2. Advantages of Running a Health Care Business as a Corporation in BC
The most common advantages generally fall into the realm of tax-planning. Your accountant can use your corporate structure to reduce or defer the medical professional’s tax liability. This often involves the addition of anon-voting shareholder, such as a spouse. Other advantages may include better financing options for medical equipment, the perks of corporate banking, corporate insurance, and potential research tax incentives.
3. Downsides to Incorporating your Health Care Business
The initial legal fees and accounting fees can be expensive. There are annual accounting fees to file taxes, and annual legal fees to file annual reports and maintain the corporate record book. The College may likely charge an annual fee to renew your corporate permit.
4. Liability Protection for Malpractice
A medical professional corporation does not protect the medical professional shareholder(s) from personal liability for medical malpractice.
5. Liability Protection for Debts and Non-Professional Liabilities
Corporations generally protect the shareholder’s personal assets from business debts and non-professional liabilities, but there are exceptions.
6. The Risk of Multiple Shareholders
If one shareholder is unwilling to sign corporate documents, then the corporation could be at risk of issues with the CRA or risk being dissolved by BC Registries. This risk can be reduced by having a lawyer draft a shareholder’s agreement that includes a buy-out option for the medical professional in case of disputes.
7. The Process to Incorporate a Medical Professional Corporation in British Columbia
Typically, you, as the qualified medical professional, will first confirm with the appropriate college that you are eligible. You can discuss with your accountant the potential tax and other savings for incorporation. Next, you will hire an experienced corporate lawyer to assist with the legal setup of your corporation, including name registration in accordance with the bylaws of the appropriate college. Your corporate lawyer will liaison with you and the college to complete the requirements to incorporate the medical professional corporation in BC. Finally, the lawyer will typically provide you a package of documents (excerpts from your new corporate minute book) to take to your bank and accountant.
8. How to Get Started Incorporating your Medical Professional Corporation in BC
When you are ready to get started, reach out to an experienced corporate legal team in British Columbia, such as the one at Johnston Franklin Bishop. The ideal corporate legal team will guide you through the entire process of incorporating, help you maintain your corporate records, work with you to ensure compliance with legal and regulatory requirements, and be available to serve as your corporate lawyer for the lifetime of your business. Learn more, without obligation, by emailing corporate lawyer Andrew Reed at ar@jfblaw.ca or calling Andrew at 250-756-3823.
9. Additional Resources:
Health Professions Act
College of Physicians and Surgeons in British Columbia (Medical Doctors)
College of Complementary Health Professionals of BC (Chiropractors)
College of Health and Care Professionals in BC (Optometrists)
British Columbia College of Oral Health Professionals (Dentists)
