Incorporation For Optometrist - Optometric Corporation.
A LEGAL BUSINESS IS A HEALTHY BUSINESS
Optometrists know the importance of seeing clearly, and in business, it’s no different. When you're ready to take the next step in your career by establishing an optometric corporation, Parr Business Law can remove the headache of ongoing administrative work and yearly filings, allowing you to take advantage of tax savings and limited liability.
The Benefits of Incorporation for Optometrists
Tax Benefits: Optometrists who operate as a sole proprietorship often find themselves paying between 30-40% in personal income tax. Incorporation helps defer and reduce personal income tax, allowing you to reach your long-term financial goals such as paying off medical school debt, purchasing a home, retiring early, or leaving a nest egg for your children and grandchildren.
The general corporate tax rate is lower than the personal income tax rate, and many Canadian private corporations can claim the small business deduction, leaving the federal tax rate at just 9%.
There are other tax strategies that can reduce your lifetime tax payable including the lifetime capital gains exemption, use of a holding company, and estate freezes. These are key tax strategies that will help defer and reduce your tax liability.
Business Succession Planning: Corporations can continue indefinitely, which can be advantageous for succession planning. A good succession plan should consider who is taking over your business, who and what kind of support you need, what your exit strategy is, and tax minimization strategies. It’s important to make sure your business is structured properly to take advantage of all the tax savings available. This is much easier with a corporation rather than a sole proprietorship.
Professional Credibility & Image: An incorporated practice may add a feeling of confidence and credibility to potential clients and other professionals.
Limited Liability: Incorporation can protect personal assets by limiting liability to the corporation. While you’ll always have certain personal professional liability, the corporation becomes involved in a bankruptcy or litigation battle, in many cases you may be able to shield your personal assets.
Is Incorporation Right For You?
With many benefits of incorporation, it’s important to understand that there will be an extra layer of complexity to running your business. There will be more administrative work, an additional tax return, and yearly corporate filings. A trusted team of professionals including a lawyer and an accountant can help you manage these additional complexities so you don’t get overwhelmed with administrative paperwork and filings. You will also need to pay initial fees to set up your corporation and pay yearly renewal fees. If you are unsure if incorporating is right for you, don’t hesitate to schedule a consultation call with us.
FAQs
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Unincorporated Optometrists will pay considerably more taxes than necessary. They may also have a harder time securing financing and have limited credit options.
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No. Optometric services can only be provided upon receipt of a BC Optometric Corporation permit issued by the College.
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You may want to set up a corporate bank account which can simplify bookkeeping, streamline the tax filing process, provide better access to loans and credit, and offer many more benefits. You’ll also open up a MyCRA Business Account once the CRA sends you a business number. Additionally, you must ensure that you are renewing your registration with the College prior to each year’s deadline, staying compliant with Bylaws, and meeting any other post-incorporation responsibilities.
Ready to incorporate your optometrist business?
When it’s time to incorporate as a Canadian Optometrist, Parr Business Law can help you navigate the incorporation process with confidence and clarity. Our lawyers have the specialized knowledge to provide you with reliable and candid legal advice so you can reduce your tax liability and create professional credibility among your clients. Schedule a consultation call with us today to learn more.