Medical Professional Corporations in Ontario: What Physicians Should Know 

Many Ontario physicians eventually ask whether they should incorporate. A medical professional corporation (MPC) can create tax-planning opportunities, but it also brings extra cost, administration and rules that don’t apply to ordinary businesses. Whether it’s right for you depends on your income, spending and long-term plans. 

The short answer: an MPC is a corporation through which a physician practises medicine, authorised by the College of Physicians and Surgeons of Ontario (CPSO). Its main advantage is that income left in the corporation may be taxed at a lower corporate rate until it’s paid out. That benefit is greatest when you earn more than you need to live on. It isn’t a way to avoid tax altogether, and it doesn’t suit every physician. 

This article is general information. Speak with your accountant and a lawyer before incorporating. 

What is a medical professional corporation? 

An MPC is a corporation that carries on the practice of medicine. In Ontario: 

• The corporation must hold a Certificate of Authorization from the CPSO. 

• The certificate must be renewed every year. The CPSO’s FAQ lists a $400 application fee and a $175 renewal fee. 

• The corporation’s name must follow a set format: the physician’s surname as it appears on the CPSO register, followed by “Medicine Professional Corporation” (for example, “Smith Medicine Professional Corporation”). 

Physician shareholders must be listed on the CPSO application, and changes in physician shareholders must be reported to the CPSO. 

Who can own shares? 

Ontario’s rules allow certain family members of a physician to hold shares in an MPC, typically non-voting shares, with the physician controlling the corporation. The CPSO’s FAQ notes, for example, that step-children, step-parents and common-law spouses are accepted as family-member shareholders, while parents-in-law are not. 

Family shareholding is mainly relevant to income splitting, which is now heavily restricted (see below). Have a lawyer confirm the share structure for your circumstances. 

How an MPC can affect your taxes 

Lower tax on income left in the corporation 

A Canadian-controlled private corporation may claim the small business deduction on active business income up to the business limit. According to the CRA, the federal small business rate is 9% and Ontario’s lower rate is 3.2%, both on a $500,000 business limit. 

Personal tax rates for high-earning physicians are much higher. If you leave income in the corporation that you don’t need now, you defer personal tax until you take it out. This is a deferral, not a permanent saving. When the corporation later pays you salary or dividends, personal tax applies. 

Business limit sharing and passive income 

• Physicians who practise together through associated corporations may have to share a business limit. 

• If your MPC builds up investments, the CRA reduces the business limit once adjusted aggregate investment income exceeds $50,000, and eliminates it at $150,000. Investing inside the corporation needs planning. 

Paying yourself 

You can pay yourself salary, dividends or a mix. Salary creates RRSP room and CPP contributions; dividends don’t. See Salary vs Dividends in Ontario. 

Income splitting is limited 

Before 2018, many physicians paid dividends to family members in lower tax brackets. The tax on split income (TOSI) rules now restrict this. One of the main exceptions, for “excluded shares”, is not available for shares of a professional corporation, according to the CRA. So dividends to family members from an MPC are often taxed at the top rate unless another exception applies. Get advice before paying dividends to anyone other than yourself. 

Income that may not belong in the corporation 

Not all of a physician’s income can be earned through an MPC. For example, income from an employment relationship (such as a salaried hospital or university position) is generally earned by you personally. Review each income source with your accountant. 

What an MPC doesn’t do 

• It doesn’t remove professional liability. Incorporating doesn’t shield you from liability for your own professional practice. 

• It isn’t automatically cheaper. If you need nearly all your income for personal spending, the tax deferral may be small compared with the extra costs. 

Costs and ongoing obligations 

Is an MPC right for you? Questions to ask 

1. Do you earn significantly more than you need to live on? 

2. Do you plan to save or invest surplus income over several years? 

3. How much of your income is from fee-for-service or other practice income, rather than employment? 

4. Do you practise with other physicians who are incorporated? 

5. Are you comfortable with the extra administration and cost? 

If you answer “yes” to the first two, an MPC is often worth a detailed review. 

Frequently asked questions 

Should I incorporate my medical practice? 
It depends on your income, savings and plans. Incorporation tends to help most when you can leave surplus income in the corporation. Get a calculation based on your numbers before deciding. 

Can my spouse own shares in my medical professional corporation? 
Ontario rules allow certain family members to hold shares, typically non-voting. However, dividends to family members are often caught by the tax on split income rules. Get tax and legal advice. 

Does a medical professional corporation protect me from liability? 
No. Incorporating doesn’t protect a physician from professional liability for their own practice. 

How often do I renew my CPSO certificate? 
Every year. The CPSO lists a $175 renewal fee. 

Do I still file a personal tax return if I have an MPC? 
Yes. You’ll file a personal T1 return as well as the corporation’s T2 return. 

Talk to CPAMG 

CPAMG works with physicians and other healthcare professionals in Etobicoke, Toronto and across the GTA on professional corporation accounting, corporate tax and planning. Learn about our accounting for healthcare professionals or book a consultation to review whether an MPC suits you. 

General information verified 11 October 2026. Rules on professional corporations, share ownership and taxation are complex and change over time. This is not tax, legal or financial advice. Consult a CPA and a lawyer before incorporating. 

C. Tax accuracy and source notes 

Tax year: current rules (2026). No personal tax rates quoted. 

D. Internal links 

E. External references 

Recommended in-body links: the CPSO FAQ (certificate section) and the CRA TOSI excluded shares page. 

F. FAQs 

Included (5). 

G. Image and visual brief 

H. Social distribution 

Caption: Should you incorporate your medical practice? How Ontario medical professional corporations work, what they can (and can’t) do for your taxes, and five questions to ask first. [link] 

LinkedIn angle: An MPC is a tax deferral, not a tax eliminator. A balanced guide for Ontario physicians. 

I. Publication checklist