Incorporating as a Pharmacist
A LEGAL BUSINESS IS A HEALTHY BUSINESS
A pharmacy professional corporation (PPC) is a type of corporation established by pharmacists to provide pharmaceutical services while achieving the benefits of a corporate structure. When it’s time to take your career to the next level, Parr Business Law can help you set up a PPC and gain access to a wealth of benefits to ensure the longevity of your practice.
The Benefits of Incorporation for Pharmacists
Tax Benefits
As high earning employees or sole proprietors, Pharmacists are subject to a heavy tax burden, often allocating 30%-40% of their salary towards taxes every year. PPCs can benefit from corporate tax rates and access the small business deduction, which would leave their combined federal and provincial tax rate at just 11%. There are also opportunities for income splitting, tax deferral and more tax savings. Be sure to consult with tax experts to plan an efficient tax strategy.
Limited Liability:
PPCs can protect personal assets by limiting certain liabilities to the corporation, as shareholders are generally not personally liable for the debts and claims of the pharmacy.
Professional Credibility: A PPC enhances the professional image and credibility of a pharmacist, adding a feeling of confidence to potential clients and other professionals.
Business Succession & Estate Planning: A PPC makes estate planning easier and opens up more options for succession planning.
Is Incorporation right for you?
If you are interested in forming a PPC, it's essential to be informed about what that entails to determine if it aligns with your long-term goals.
Incorporating a Pharmaceutical practice can help reduce your overall tax burden, facilitate efficient estate planning, manage liabilities, and create a professional image. However, it does introduce an additional layer of complexity to your business. A good team of professionals including a lawyer and an accountant can help you manage these additional complexities so you don’t get buried in administrative paperwork and filings.
When you incorporate, you’ll have to file a separate income tax return for your practice, in addition to your personal tax return. It's also important to be aware of the fees involved when initiating and maintaining your PPC. You will need to pay initial fees to set up your corporation as well as yearly renewal fees.
FAQs
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Registered Pharmacists holding valid licenses from the College of Pharmacists of British Columbia are typically eligible to set up a PPC in BC.
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Unincorporated Pharmacists may be paying excessive personal tax and exposing themselves to unnecessary liability. They may also find that their options for business financing and credit are limited.
Need advice on forming a Pharmacy Professional Corporation?
When it’s time to establish a Pharmacy Professional Corporation, 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.