Moving a live practice in without a tax bill
Handing an operating practice to a new corporation is a sale in the Income Tax Act's eyes, and a careless one triggers recapture on every instrument that has been written down. The fix is the section 85 rollover: assets transferred at elected amounts, gains and recapture deferred, with the T2057 election filed on time and the numbers chosen deliberately.
| What moves into the corporation | How it moves |
|---|---|
| Total stations, GNSS receivers, trucks, drone | Section 85, elected at cost values so day one triggers no recapture |
| Survey records, plan library, firm name | Goodwill under the same election, with a value set now that future planning can rely on |
| Open files and unbilled work | Assigned to the corporation, which earns and taxes the WIP from there |
| Certificate of Authorization | Does not move. The corporation applies to AOLS for its own before taking a file |
| Equipment loans and the operating line | Lender consent, security re-registered against the corporation |
HST on the transfer usually disappears into the election available on the sale of a business as a going concern, provided the paperwork is done before closing rather than remembered after. The point of doing all this precisely is not elegance; it is that the practice keeps working through the change, with the same files open on the same desks.
AOLS authorizes the practice; Ontario registers the company
Under the Surveyors Act, no business may offer cadastral surveying to the public without a Certificate of Authorization, and the professional work must be conducted under the supervision of a licensed OLS. Ontario has no separate professional-corporation regime for surveyors, so the vehicle is a standard Ontario business corporation that then holds a C of A. That ordering has two practical consequences. The proposed corporate name should be cleared against AOLS's expectations as well as the corporate registry, because a name acceptable to one can fail the other. And the share and director structure should be checked against the Act and AOLS's conditions before articles are filed, since amending articles later costs more than asking first. The certificate renews annually, so the compliance calendar we set up covers AOLS alongside the CRA.
The math is the deferral, not the letterhead
Incorporation pays when profit stays inside. Retained earnings face roughly 12.2% on the first $500,000 in Ontario against personal rates reaching 53.53%, and that spread funds the next instrument set or the slow approval year. A solo OLS doing residential SRPRs who spends every dollar the practice earns gains administration, not tax, and we will say so in the free discovery call rather than sell a structure. What incorporation never does is move professional responsibility: the surveyor remains answerable for work done under their supervision, and insurance carries that risk. The corporation's shield covers the commercial layer, the lease, the equipment financing, the contract dispute that is not about the boundary. Solo practitioners who want a CPA on call between decisions often run on CPA Quick Support at $99 a month until monthly accounting earns its keep.
Draft the shares for the partner you do not have yet
Survey practices change hands slowly, usually to an OLS who has been running crews for years, and the incorporation is the cheapest moment to prepare for that. Our Incorporation service drafts share classes that let a future associate buy in gradually, and where two principals start together, a shareholder agreement whose valuation formula reckons with unbilled work and the records, not just book value. Two clocks also start at incorporation worth knowing about: the 24-month holding period behind the capital gains exemption, and the corporation's own history with lenders. Both belong to whoever plans ahead, which is the standing theme of our Tax Planning & Advisory work once the corporation exists.
Run from our Mississauga office as one project, the sequence is short: name cleared both ways, articles with a working share structure, CRA program accounts with HST from day one since survey fees are taxable, the section 85 package for the assets, the C of A application, then banking and a first-year filing calendar. Scope is quoted in writing before anything starts.
