Incorporate · By Industry
Physicians and dentists incorporate as a professional corporation (PC), a special OBCA corporation with strict naming and share rules, that must obtain a Certificate of Authorization from your College before it can practise. The main benefit is tax deferral on retained earnings at ~12.2%. CorpStart prepares the incorporation; the College authorization is a separate regulatory step.
Physicians and dentists incorporate as a professional corporation (PC), a special OBCA corporation with strict naming and share rules, that must obtain a Certificate of Authorization from your College before it can practise. The main benefit is tax deferral on retained earnings at ~12.2%. CorpStart prepares the incorporation; the College authorization is a separate regulatory step.
Medicine and dentistry are regulated professions, so you can't simply set up a standard business corporation the way a consultant does. Physicians incorporate under the oversight of the College of Physicians and Surgeons of Ontario (CPSO), and dentists under the Royal College of Dental Surgeons of Ontario (RCDSO). What you form is a professional corporation (PC): an OBCA corporation that carries extra rules baked in by the Business Corporations Act and your College's regulations.
The practical differences matter. A PC's articles must restrict its business to the practice of the profession (plus activities related to or ancillary to it). Its name must follow a specific format. Its shares are restricted. And, crucially, it cannot lawfully practise until your College issues a Certificate of Authorization. Incorporating and being authorized to practise through the corporation are two separate steps, and both have to be done right.
The name of a professional corporation is prescribed, not chosen freely. It must include the surname of one or more shareholders as used in their College register, a reference to the profession, and the words "Professional Corporation": for example, "Dr. Jane Smith Medicine Professional Corporation" or "Smith Dentistry Professional Corporation." You can't invent a catchy trade name for the corporation itself the way a regular business can; the format is set by regulation and the College reviews it.
Share ownership is also restricted. For medicine and dentistry PCs, voting shares must generally be held by members of the same profession, while the current rules allow certain family members (a spouse, child or parent, held in trust for minors) to hold non-voting shares, a limited opening for family involvement, but far narrower than a normal corporation. Because these rules are technical and change, your PC's share structure should be set up to match your College's current requirements from day one. Getting the shares wrong can delay or jeopardize your Certificate of Authorization.
The reason most doctors and dentists incorporate is tax deferral. Professional income earned through a PC is active business income, so the first $500,000 is taxed at roughly 12.2% in Ontario instead of a personal rate approaching 53.5%. Money you don't need to draw out stays in the corporation, lightly taxed, to invest, pay down practice debt, buy equipment, or smooth income across years. Over a career, that deferral compounds meaningfully.
Be clear-eyed, though: it's deferral, not avoidance. When the money eventually comes out to you as salary or dividends, you pay personal tax then; the system is roughly integrated. And the old family income-splitting play has been curtailed by the tax-on-split-income (TOSI) rules since 2018, so paying dividends to a spouse or adult children who don't genuinely work in the practice generally no longer produces savings. The real, durable benefits are deferral, the ability to time income, limited liability for the business side of the practice, and clean succession planning, not a tax dodge.
Here's the sequence. First, the corporation is created: Articles of Incorporation filed with the Ontario Business Registry, with the special PC name, restricted business purpose, and compliant share structure. That's the piece CorpStart prepares and files for you, the same day-to-two-days as any Ontario incorporation.
Second, and this is the part only your College can grant, you apply to the CPSO (physicians) or RCDSO (dentists) for a Certificate of Authorization, submitting your incorporation documents, share structure details, and the College's forms and fees. The PC cannot practise or bill through the corporation until that certificate is issued, and you'll renew it periodically. CorpStart prepares the incorporation to meet the College's requirements so your authorization application goes smoothly, but the authorization itself is a regulatory approval we can't issue for you; it's between you and your College.
You answer a questionnaire built for professional corporations: your name as registered with your College, the profession, your shareholders (and any permitted family non-voting shareholders), and your Ontario registered office. We set the name format, the restricted business purpose, and the share structure to line up with your College's rules.
We prepare your Articles of Incorporation, By-law No. 1, organizational resolutions and share registers, and file with the Ontario Business Registry, usually within one to two business hours, then send your digital minute book the same day, ready to attach to your Certificate of Authorization application. From there, you (or your accountant) submit to the CPSO or RCDSO.
Two CorpStart steps, then your College's authorization.
Tell us about your practice and shareholders
Give your College-registered name, profession, shareholders and Ontario registered office. We set the PC name format, restricted purpose and share structure.
We prepare and file the PC
CorpStart drafts your Articles, By-law No. 1 and resolutions and files with the Ontario Business Registry, usually within 1 to 2 business hours.
Apply to your College
Use your minute book to apply to the CPSO or RCDSO for a Certificate of Authorization. Your PC can practise once the College issues it.
Standard corporation vs. medical/dental professional corporation
| Factor | Standard corporation | Professional corporation |
|---|---|---|
| Who can incorporate | Anyone | Members of the profession only |
| Name | Free to choose (or numbered) | Must include your name + 'Professional Corporation' |
| Business purpose | General | Restricted to practising the profession |
| Share ownership | Open | Restricted (limited family non-voting shares) |
| College authorization needed? | No | Yes: Certificate of Authorization |
| Main benefit | Deferral + liability | Tax deferral at ~12.2% |
Do I have to use a professional corporation, or can I use a regular one?
As a licensed physician or dentist practising your profession, you must use a professional corporation; a standard business corporation can't legally provide your professional services. The PC has special naming, purpose and share rules and needs a Certificate of Authorization from your College (CPSO for doctors, RCDSO for dentists) before it can practise.
What does the name of my professional corporation have to be?
It's prescribed by regulation: your surname as registered with your College, a reference to the profession, and the words 'Professional Corporation': for example, 'Dr. Jane Smith Medicine Professional Corporation.' You can't pick a free-form trade name for the corporation itself. The College reviews the name as part of authorization, which is why we set it correctly at incorporation.
Can my spouse or kids own shares in my PC?
In a limited way. Voting shares generally must be held by members of the profession, but current rules allow certain family members (a spouse, child or parent, held in trust for a minor) to hold non-voting shares. Note that TOSI rules since 2018 limit the tax benefit of paying dividends to family who don't genuinely work in the practice, so family shares are more about structure than easy income-splitting today.
Does CorpStart get my Certificate of Authorization for me?
No, only your College can issue it. CorpStart prepares and files the incorporation to meet your College's naming, purpose and share requirements, so your authorization application goes smoothly. You (or your accountant) then submit the College's application, your incorporation documents and fees to the CPSO or RCDSO. The PC can't practise until the certificate is issued.
Is the tax benefit worth it for a new physician or dentist?
It depends on how much income you can leave in the corporation. If you draw out everything to cover student loans and living costs, the deferral advantage is small in the early years. Once your income comfortably exceeds your needs, retaining profit at ~12.2% instead of your personal rate compounds meaningfully. Run the numbers with an accountant who works with health professionals.
For doctors and dentists.
$279 service fee + $300 Ontario government fee. We prepare a College-compliant professional corporation; your Certificate of Authorization is a separate step with the CPSO or RCDSO.
Start my corporationCorpStart is a document preparation service, not a law firm. The information on this page is general in nature and does not constitute legal or tax advice. For advice specific to your situation, consult a licensed lawyer or accountant.