Professional Corporation Setup Cost Calculator Ontario
Every fee to get a professional corporation running in Ontario, from the incorporation to the Certificate of Authorization, plus the annual cost to keep it and an honest answer on whether the tax deferral at your billings justifies it.
year one, all in
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Setup Cost, Line by Line
| Item | Basis | Amount |
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Annual Cost to Keep It Running
| Item | Basis | Amount |
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What the Deferral Is Actually Worth
| Step | Basis | Amount |
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Rules That Decide This Before the Numbers Do
What to Do Next
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Disclaimer: Regulator fees change and vary by profession. The CPSO application fee of $400 and the RCDSO application fee of $750 with a renewal of $175 where paid on or before 3 August are taken from those Colleges’ own published information and are correct at the time of writing. Fees for other regulators are left blank for you to enter, because we would rather show nothing than show a figure we have not verified. The deferral figure assumes personal drawings are taxed at an average rate of 40% and that retained income is taxed at the Ontario small business rate of 12.2% against a top personal rate of 53.53%. Your actual position depends on your income mix, other sources of income and the province you practise in. This page is general information, not tax or legal advice.
What a Professional Corporation Is, and What It Is Not
A professional corporation is an ordinary Ontario corporation with extra restrictions imposed by your regulator. It lets you earn professional income through a company and pay corporate rates on what you leave behind. It does not change how you practise, and it does not protect you from a negligence claim.
| What It Does | What It Does Not Do |
|---|---|
| Defers tax on income you leave in the corporation | Limit your professional liability |
| Smooths income across years | Let you split income freely with family |
| Allows a corporate investment portfolio to build | Remove any regulatory obligation |
| Creates flexibility on salary and dividends | Change who is responsible for your practice |
It Is a Two-Step Process, and the Order Matters
- Incorporate under the Ontario Business Corporations Act. A professional corporation must be an Ontario corporation. A federal corporation cannot be used.
- Apply to your regulator for a Certificate of Authorization, with the articles, a corporation profile report and the undertakings your regulator requires.
You cannot practise through the corporation until the certificate is issued. Until then you continue to bill personally, which is why the timing of the first invoice through the corporation matters as much as the incorporation date.
What It Costs
| Item | Amount | Source |
|---|---|---|
| Ontario incorporation, government fee | $300 | Ontario Business Registry |
| NUANS name search | $25 | Our cost, passed through |
| Our professional fee | $35 | Fixed fee, including HST |
| Certificate of Authorization, physicians | $400 | CPSO published fee |
| Certificate of Authorization, dentists | $750 | RCDSO published fee |
| Annual renewal, dentists | $175 | RCDSO, rising after 3 August |
| Ontario annual return | $50 | Our fixed fee |
| T2 return and financial statements | $400 | Our fixed fee |
We only publish fees we have verified. The CPSO and RCDSO figures come from those Colleges’ own published information. For the other regulators the calculator leaves the field blank for you to fill in, because a made-up number on a cost calculator is worse than no number at all. If you tell us your regulator, we will confirm the current fee before you commit to anything.
Who Can Own the Shares
This is where the professions differ most, and it is set by regulation rather than by choice.
| Profession | Voting Shares | Non-Voting Shares |
|---|---|---|
| Physicians and dentists | Members of the profession only | May be held by a spouse, child or parent, or in trust for a minor child |
| Other regulated health professions | Members of the profession only | Usually permitted, confirm with your College |
| Lawyers | Licensees only | Licensees only |
| Chartered professional accountants | Members only | Members only |
| Engineers | Governed by the Certificate of Authorization rules for offering services to the public | Confirm with PEO |
The Split Income Rules Ended the Main Reason People Used to Incorporate
Before 2018, a physician or dentist could put non-voting shares in the hands of a spouse and adult children and pay dividends to each of them, using their lower brackets and personal credits. That was frequently worth more than the deferral.
The tax on split income changed it. A dividend paid to a family member is now taxed at the top rate unless a specific exclusion applies, and the exclusion that would normally save an owner-managed company is not available here.
| Exclusion | Available to a Professional Corporation |
|---|---|
| Excluded shares, 10% of votes and value | No, it is denied where the corporation carries on a services business |
| Excluded business, averaging twenty hours a week in the business | Yes, where the family member genuinely works in the practice |
| Spouse of an owner aged 65 or over | Yes |
| Reasonable return for an adult aged 25 or over | In principle, but very hard to support for a passive shareholder |
| Inherited property in certain cases | Narrow |
A dividend to an adult child at university is caught. It is taxed at 53.53% with no personal credits available against it, which is worse than if you had simply taken the money yourself. Family shares still have a role for a future sale and for a spouse once you reach 65, but as a way of splitting current income they no longer work.
What Still Works: The Deferral
Income left in the corporation is taxed at 12.2% in Ontario on the first $500,000 rather than at up to 53.53% personally. That is a deferral of 41.33 cents on every dollar you do not need to live on, and it is the whole case for incorporating.
The word deferral matters. The tax is paid eventually, when the money comes out as salary or dividends. What you gain is the use of that money in the meantime, invested inside the corporation, for as long as you leave it there.
Naming Rules
The corporate name must include your surname exactly as it appears on your regulator’s register, and the words your regulator requires, with nothing else added. For a physician that is Medicine Professional Corporation. Getting the name wrong is the most common reason a Certificate of Authorization application is rejected, and fixing it means articles of amendment and a second filing fee.
It Does Not Limit Your Professional Liability
Every Ontario regulator requires that the professional remains personally liable for professional negligence, and the legislation says so directly. A patient or client can sue you personally whatever the corporation does.
What the corporation does affect is ordinary commercial liability, such as a lease or a supplier contract entered into by the corporation. That is real but it is a much smaller part of a professional’s risk than the negligence exposure, which is what insurance is for.
Timing and the First Year
- Choose the year end deliberately. A year end shortly after incorporation gives a short first year and an early first filing.
- Do not bill through the corporation before the certificate is issued. Income earned before that date is yours personally.
- Deal with existing contracts and billing numbers. Hospital, OHIP and insurer arrangements often need updating.
- Register for payroll if you will take a salary, and remember that a salary creates RRSP room while a dividend does not.
- Diarise the renewal. Certificates expire annually and some regulators no longer allow a grace period.
What This Calculator Does Not Cover
- Legal fees for custom articles where your structure is more complex than a single professional and family shares
- A holding company above the professional corporation, which some regulators restrict
- The alternative minimum tax and other personal considerations
- Provinces other than Ontario, which have different regulators and different rules on who may own shares
- Transferring an existing practice into the corporation, which may need a section 85 rollover
- Your regulator’s insurance and reporting requirements for a corporation
The incorporation is the easy part. The name, the share structure, the certificate application and the first year end are where these go wrong. We handle all four on a fixed fee. Full detail is on our incorporation service page.
Frequently Asked Questions
Common questions from Ontario professionals considering incorporation.
Related Calculators and Guides
More tools for incorporated professionals.
Incorporate First, Then the Certificate. We Do Both.
Tell us your profession and your regulator. We confirm the current fee, incorporate with the correct name and restricted articles, prepare the Certificate of Authorization application, and set the year end so your first filing is straightforward.