When the DPC pays off, and when to wait
The honest test is retained earnings. If the practice earns more than the household spends, every dollar left inside the DPC is taxed around 12.2% instead of personal rates that reach 53.53%, and the difference compounds as working capital, debt repayment or investment. At top rates the deferral is worth roughly 41 cents on every retained dollar, and it lasts as long as the money keeps working in the practice. If you are buying a practice, the case is even stronger: the corporation borrows, and low-taxed corporate dollars service the loan instead of after-personal-tax dollars.
An associate who spends most of what they earn, or is still clearing student debt, gains little from the structure and inherits its costs: incorporation, annual filings, RCDSO renewal. For that stage, CPA Quick Support at $99 a month keeps a CPA on call for the salary-negotiation and first-contract years, and incorporation waits until the math turns.
What RCDSO requires before you bill through it
A DPC is an Ontario business corporation that must hold a Certificate of Authorization from the RCDSO before it practises, renewed annually. The name must follow the College's required form, including the words Dentistry Professional Corporation, and the corporation may carry on the practice of dentistry and activities related to it, not a sideline business. Renewal is not a rubber stamp either: the College confirms that shareholders, directors and the name still comply, so the minute book and share register need to be kept current rather than reconstructed each spring.
Two limits are worth stating plainly. The DPC does not shield you from professional liability; malpractice exposure follows the dentist regardless of structure. And landlords, banks and equipment lessors routinely require personal guarantees, so commercial separation is real but narrower than the brochure version.
The family-share privilege, honestly stated
Dentists and physicians are the only Ontario professions whose corporations may issue non-voting shares to family members. That is a genuine structural asset, but its payoff is mostly at the end: TOSI taxes dividends to family shareholders at the top personal rate unless an exception applies, chiefly a spouse once you are 65 or a family member genuinely averaging about 20 hours a week in the practice. Day-to-day income sprinkling is largely gone; what survives is the exit value of those shares, which belongs to the tax-planning conversation.
| Position | Who is allowed |
|---|---|
| Voting shares | RCDSO-licensed dentists only |
| Non-voting shares | The dentist's spouse, children or parents; a trust may hold them for a minor child |
| Directors and officers | Dentists who are voting shareholders |
| Holding companies, staff, unrelated investors | Not permitted |
We design the share classes on day one so growth shares exist for family members if you want them later. Amending a share structure after the fact is legal work; getting it right at incorporation is a paragraph.
Moving an existing practice in
An established sole-proprietor practice does not just start invoicing through the new corporation; the goodwill and equipment have real value, and transferring them is a disposition. A section 85 rollover moves those assets in at elected amounts so no tax is triggered on the way, with the election filed on Form T2057. Because an unregistered exempt practice charges no HST on most of the transfer, the HST side is usually quiet, but we check it, including the section 167 election, whenever the practice has a registration for orthodontic or retail sales.
Around the rollover sits the operational move: new CRA program accounts for corporate tax and payroll, insurer assignment and CDCP enrolment redirected to the corporation's bank account, hygiene employment agreements and any associate contracts re-papered to the DPC, and lender consents where equipment is financed. We register the payroll account before the first hygiene pay run through the corporation, because a missed first remittance is the most common way a new DPC introduces itself to the CRA. This is where our Incorporation service earns its fee, and the first-year rhythm of books, payroll and filings is handled by End-to-End Accounting so the new structure starts clean.
Timing is the last lever: we pick an incorporation date and first year-end that give a sensible short first year and keep tax deadlines away from your busiest clinical months. Fees for the whole package are quoted in writing after a free 15-minute discovery call, so the decision costs nothing but the conversation.
