Incorporate Doctor Medical Practice With A Professional Corporation
Congratulations on obtaining your medical license and beginning your career as a physician / doctor. Did you know that the Health Professions Act (Alberta) allows for the practice of medicine by a medical professional corporation under certain conditions? People frequently refer to a medical professional corporations as a medical PC or a doctor PC. If starting to run your practice through a corporation makes sense, the medical professional corporation lawyers at Kahane Law Office in Calgary, Alberta are here to help you take the next step to a prudent medical career.
Rules Medical PCs Must Follow
Two key components set the rules that all medical PCs must follow. The conditions for a medical professional corporation include:
- The medical professional corporation must be incorporated under the Business Corporations Act (Alberta); and lastly
- The medical PC must obtain a permit from the College of Physicians & Surgeons of Alberta (CPSA).
Incorporation of your practice as a doctor with a medical PC means that shareholders own shares in the medical professional corporation. Shareholders may include both you and, if you want, your family members. The medical PC owns the medical practice, of which you would become an employee. We work with your accountant to ensure that we set everything up in a way that works for you.
Advantages Of A Medical PC In Alberta for Doctors
Before incorporating, it is key that a doctor understands the benefits of using a PC. The alternative involves running their practice in their own name. There are many advantages to operating your medical practice under a medical professional corporation. For example, these advantages include:
- Income Tax Savings: The Canadian tax rates for individual doctors tend to be significantly higher than the corresponding tax rates for medical PCs your medical professional corporation will pay the lower rate and you are just taxed on the income you draw.
- Tax Deferral: When people earn their money as an individual doctor, they pay tax in the tax year that they earned the money. When you incorporate with a medical PC you do not. You take out the money that you need from the corporation and pay personal income tax only on that amount. Any money that you do not need to take out of the medical PC, can stay in the company. In this case it is not taxed at your personal income tax level, but rather taxed at the lower corporate tax rate and lastly,
- Income Splitting: Canada operates on a graduated tax scale. With a medical professional corporation, your corporation is permitted to pay income to all of its employees and dividends to all of its shareholders. This means that a married couple often pays less tax on the same amount of household income if they incorporate first. Not all medical PCs can do this so speak to our corporate lawyers today. we help you to determine if your profession and professional standing qualifies.
A Word About Limited Medical Liability & PCs
It is important to talk to our medical PC lawyers. Medical PCs do NOT include the same type of liability protection that regular corporations do. The law prevents you from avoiding this liability with a medical or doctor PC. Governing bodies allow for medical PCs. They allow them only as a mechanism to permit income tax savings. However, not a way around liability for medical malpractice. People often lose sight of this, yet it is no replacement for insurance and performing at a high standard of care.
Kahane Law Office’s Flat Rate Billing Structure for A Medical Professional Corporation
Flat rates mean that you know what you pay, before committing. Kahane law offers a flat rate billing structure of $1,999.00 to incorporate your medical professional corporation for doctors. This covers all costs. These include all necessary government registrations and filings. In addition, it includes the cost of obtaining your Medical PC permit from the Alberta College of Physicians and Surgeons.
If you are a doctor, the business and corporate lawyers at Kahane Law Office in Calgary help with your medical professional corporation (PC) legal needs. Makes sure you start off on the right foot when it comes to putting your corporation together. We can be reached on our toll-free line at 1-877-225-8817 (or 403-225-8810 locally in Calgary, Alberta), or email us directly here.