Corporate and business planning

Once you are incorporated, your company and your household are one financial system. We plan them as one.

Illustration of a company, a home, a holding structure and a shield

Should I incorporate?

Only if you can leave profit in the company. The main benefit is deferral: active business income up to the small business limit is taxed at a low corporate rate, so profit you do not need personally stays invested with far more of it intact. If you draw out everything you earn, incorporating mostly buys you accounting fees.

The other reasons are real but secondary: limited liability, a more flexible pay structure, and access to the Lifetime Capital Gains Exemption if you eventually sell shares. We look at your actual drawings and profit before answering, because for some clients the honest answer is not yet. The full business owner discussion is here.

What does a professional corporation actually do?

It lets regulated professionals, doctors, dentists, lawyers, accountants and engineers among them, run their practice through a company under their governing body's rules. The tax treatment is largely the same as any other corporation, with the same deferral on retained profit.

The differences are in the restrictions. Who may own shares is limited by your regulator, the corporation does not shield you from professional liability, and the rules vary between BC and Ontario. Those restrictions decide whether income splitting or a holding company is even available to you, so we check them before designing anything. Salaried professionals start here.

What's a holding company and do I need one?

A holding company sits above your operating company and owns its shares. Profit the operating company does not need can usually be moved up to it as a tax-free intercorporate dividend, where it sits away from the risks of the trading business.

It earns its keep in three situations: protecting accumulated cash from operating creditors, keeping investment income out of the operating company so the small business deduction stays intact, and cleaning up the share structure ahead of a sale. It also adds a second set of filings and costs, so it is not a default. The tax planning behind it is here.

How should I manage cash inside my corporation?

In three buckets. Working capital stays liquid and untouched, usually several months of operating costs. A tax reserve covers what is already owed. What remains is long-term money, and that is the part that needs a decision rather than a savings account.

The constraint to watch is the passive income threshold: once the corporation earns more than $50,000 a year in investment income, your small business deduction starts to be clawed back and your operating profits are taxed at the higher general rate. That is usually the moment to consider a holding company, corporate-owned insurance or an Individual Pension Plan. Investment planning covers where it goes.

How do I pay family through the business?

Two ways, with very different rules. A salary to a family member is fine provided the work is real and the pay is reasonable for that work, and it builds their RRSP room and CPP. Dividends to family members run into TOSI, the tax on split income, which taxes dividends paid to family who are not genuinely active in the business at the top rate.

There are genuine exemptions from TOSI, including family members aged 18 or over working an average of twenty hours a week in the business, owners 25 or older holding at least 10 percent of the votes and value of a company that is not a service business, and spouses of owners over 65. They are technical, and the cost of getting them wrong is the whole benefit. We check your exact facts and document the reasoning for your accountant.

How do you work with my accountant?

Alongside them, never instead of them. They report the year that happened and file the returns; we plan the decisions while they are still open, which is usually between May and December rather than in April.

In practice that means a written plan they receive before year end, with the pay structure, contributions, insurance ownership and corporate movements set out clearly so they can file against it. If you do not have an accountant, we will say so plainly and help you find one. Our three-step process is here.

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What does the right structure save?

A corporate planning case study will be added here when the approved figures and story are ready.

See all case studies

Corporate tax figures on this page are current as of September 2026. Rules change, and we review this page whenever they do.

What else do owners ask?

At what income does incorporating start to pay?

As a rough guide, once you are consistently earning more than you need to live on and can leave profit in the company, the deferral begins to outweigh the annual costs. Below that, incorporating usually adds cost without adding much benefit.

Do you replace my accountant?

Never. Your accountant reports the year accurately and files the returns; we plan the decisions before the year closes. The two roles work best in the same room, and most accountants tell us the written plan makes their job easier.

Can my corporation own my insurance?

In many cases yes, and for key person cover or a funded buy-sell agreement it usually should. Ownership affects who pays, who benefits and how the proceeds are taxed, so it is a decision to make deliberately rather than by default.

What happens to my corporation if I stop working?

It becomes either a retirement funding vehicle or an administrative burden, depending on how it was set up. A corporation wound down or converted with a plan generally costs far less tax than one dealt with after the fact.

Is a shareholders' agreement necessary with a partner?

Yes, and ideally before it is needed. It sets out what happens on death, disability, dispute or exit, and a buy-sell clause without funding behind it is a promise nobody can keep.

How much does corporate planning cost?

It depends on the structure and how many moving parts there are, and every fee is explained in writing before you decide. For most incorporated clients the first year's tax saving covers it.

Is your corporation set up to keep more of your money?

Book a complimentary 20-minute assessment and bring your last corporate year end.

Book a complimentary 20-minute assessment Call us directly: 604-618-7365