Corporate Structure for Professional Corporations

The healthcare industry moves quickly, and your career will likely go through many changes as you pursue your goals. An effective business plan should provide ample room for advancement and transformation so it can grow alongside you. As your practice and personal circumstances evolve, you should frequently revisit your plans with trusted attorneys to ensure your needs are being met.

Corporate structure or restructuring warrants careful consideration. Incorporation of a professional corporation provides many benefits, including tax, investment, estate planning, and other benefits. Contact our team today to get the proper assistance and insight needed for your professional corporation.

The Advantages of Reevaluating Your Corporate Structure

Your chosen corporate structure can substantially affect nearly every element of your practice. Utilizing a corporate structure that does not reflect your current business needs can have many repercussions. A thorough analysis of your business framework may be beneficial if you are interested in achieving any of the following:

Decreasing taxes: Many healthcare professionals see a reduced tax burden when incorporating or otherwise adjusting their corporate structure. A professional corporation receives more favorable tax treatment than a sole proprietorship or partnership. Therefore, establishing a beneficial corporate structure as part of an overall tax plan may result in significant annual savings for your business.
Succession planning: Evaluating your practice’s structure and operations in the early stages of succession planning is vital. MÉDICALOI can help you determine if any changes should be made to your corporate structure prior to listing your practice for sale, offering shares, or passing the business on to your associates. By being proactive, you can ensure a smooth transition and avoid common pitfalls that could harm your practice’s profitability.
Estate planning: You have invested financially and emotionally in your medical business, so protecting your legacy is crucial. Periodic evaluations of your corporate structure are necessary when it comes to estate planning as it allows you to assess and/or implement tax reduction and asset retention strategies.
Creating opportunities for expansion or raising capital: If your goal is to grow your current practice or purchase another location, our legal team can help you explore the ways to make your goals a reality. We will review your plans and create a tailor-made business strategy to help your business prosper.
Ensuring efficient operations: The corporate structure of your business can impact daily operations. If your system is overly complicated, it might hold your business back from running optimally. Alternatively, an overly simplistic structure may result in an inability to maximize efficiency and meet your career objectives.

What Are Some Structures You May Wish to Explore?

Healthcare professionals are faced with many choices when deciding how to structure their practice, and knowing where to start can become overwhelming. Our legal team can create a tailor-made plan that benefits your practice today and provides the potential for future flexibility and growth.

Professional Corporation

When you incorporate your practice, you separate your medical business’s income, assets, and debts from your personal finances.In legal terms, “patrimony” refers to the property or assets of an individual or entity. “Separate patrimonies” is a concept found in certain legal systems which denotes a distinct set of assets that is not available for seizure or claims against another set of assets. The idea is to segregate assets for different purposes, thus shielding one set from claims or liabilities against another set. The resulting corporation becomes the legal entity through which you operate your profession. By creating this distinction between yourself and your business, you limit the potential liability for yourself, your partners, and shareholders if financial or legal issues should arise. Additionally, incorporation frequently comes with notable tax advantages. However, incorporating at an inopportune time may cause more challenges than advantages for your business. Therefore, it is critical to carefully evaluate your current finances and business goals to determine whether incorporation is right for you.

Holding Corporation

Formulating comprehensive strategies for surplus earnings can help diversify your investments, grow your practice, and get ready for retirement. A holding corporation can be a valuable vehicle for managing a variety of investments, including real estate, stocks, and other business enterprises. Depending on your needs, a holding corporation may be integrated into your corporate structure or utilized as a standalone structure.

Planning and optimizing the framework for a holding corporation can be complex, so it may not be appropriate in all cases. Our knowledgeable legal team will work closely with your accountants and financial advisors to ensure your investments are optimized. For interested parties, we can provide information about our real estate investment strategies customized for medical professionals.

Trusts

Organizing your corporate structure should be a holistic enterprise that considers not only your business aspirations, but also your personal financial aims. The protection and transfer of assets are among the common goals of our clients. Several types of trusts exist that may be utilized for asset retention and estate planning purposes. Establishing a trust, such as a discretionary family trust (DFT), before selling your practice may be a key element of your tax planning strategy, as well as ensuring financial stability for your family’s future.

Maintenance of Your Corporate Structure

Once you have incorporated your business, you or your legal or financial representatives must engage in regular maintenance to keep your corporation up-to-date and functioning at maximum efficiency. The following critical steps must be undertaken on a frequent basis to comply with legal requirements and ensure the continued existence of your corporation:

Creating and maintaining a corporate minute book with annual updates.
Filing declarations to appropriate government authorities when you make significant changes to your corporation or its operations.
Drafting and keeping up a current corporate file with your relevant professional order.
Filing income tax returns.
Paying all necessary annual fees to the government or the regulatory branch of your professional order.

Why Hire Our Firm?

MÉDICALOI possesses a deep understanding of the distinct legal requirements of healthcare professionals. We prioritize understanding our clients’ aspirations and goals, enabling us to craft tailored plans that set them up for future success. Reach out to our Montreal office now at (438) 805-5515 for a thorough, no-obligation consultation and see how our hands-on experience can benefit you.