Accountancy Professional Corporation for Accountants

Contact Neufeld Legal PC for your incorporation legal work at 403-400-4092 / 905-616-8864 or Chris@NeufeldLegal.com

As an accountant, structuring your accounting operations to derive legal benefits and optimize profitability, should be a priority in your professional career, whether this entails the incorporation of an accountant’s professional corporation or further incorporations associated with the acquisition of real estate or the development of non-regulated business tied to one’s ever-growing accounting practice, and demands appropriate legal structuring to integrate all these business components for optimal results.

At the outset, accountants will look to incorporate their accounting practice as a professional corporation which enables them to draw upon certain business and tax advantages that are available when operating one’s professional practice through a professional corporation.

A professional corporation enables an accountant to realize certain tax advantages attainable by traditional corporations, including:

• the small business deduction, with its preferential corporate tax rates and ability to defer taxes,

• remuneration flexibility, allowing for a sufficient salary and appropriate tax planning / RRSP contributions,

• the availability of the lifetime capital gains exemption for the owner of a qualifying corporation,

• the potential for absolute tax savings from structuring the corporate payment of non-deductible or partly deductible expenses, and

• potential income splitting, although this is subject to increasingly stringent tax rules, together with restrictions on permissible shareholders.

There is also the strategic availability of using a non-calendar year-end, as well as various advanced tax planning opportunities, such as individual pension plans, retirement compensation arrangements and corporate-owned life insurance solutions.

To realize these corporate tax advantages, the provincial legislatures and the accountants’ regulatory bodies (i.e., Chartered Professional Accountants of Ontario, Chartered Professional Accountants of Alberta) agreed not to shield the accountants from liability arising from their professional malpractice and negligence, although accountants might have a degree of personal liability protection as to corporate business debts, payables and other financial obligations, although most significant debts and payment obligations contractually demand personal obligations from the accountants.

The professional corporation thus provides important corporate and tax benefits to most accountants as it relates to the management of their accounting practice, such that most accountants need to consider the value of incorporating a professional corporation.

As one’s accounting career develops and becomes about more than themselves, whether that means partnering with other accountants, hiring employees, acquiring equipment and real estate associated with the accounting practice, there are other legal demands and opportunities, which can include additional legal and corporate structuring, from legal arrangements to additional incorporations, which enables the business to exceed the limitations of the professional corporation and optimize the legal options that are available.

Throughout this process, the importance of legal planning and experience cannot be understated, such that tackling the legal aspects of your accounting business can greatly benefit from the involvement of knowledgeable legal counsel, which we have providing to accountants for over two decades.

When you incorporate your accounting practice as a professional corporation with our law firm, you will benefit from the professional services of an experienced corporate lawyer who understands the importance of devising the appropriate corporate structure for your business operations, meeting the requirements of your profession's regulatory body, on a cost-effective basis - with flat rates* for the professional corporation (Alberta and Ontario). So if you are looking to incorporate your accounting practice as a professional corporation or deal with the corporate legalities impacting your accounting professional corporation, contact our law firm at 403-400-4092 [Alberta], 905-616-8864 [Ontario] or via email at Chris@NeufeldLegal.com.

* Please contact our law firm for our current flat rates associated with undertaking the incorporation of an accountancy professional corporation in Ontario and Alberta. It should be noted that this flat rate incorporation of an accountancy professional corporation does not involve other matters that might be corrollary to the incorporation process or might be atypical for a standard incorporation, including but not limited to related legal or tax advice, engagement with other governmental bodies or professional bodies, licensing, drafting of pertinent business contracts (i.e., shareholders' agreements), negotiations, disputes, financing, coordination with other companies or other legal structuring.