Professional corporation for Physio Clinic

Tax Topics
1

Hi Everyone, I have a client, 2 unrelated Physiotherapists who would like to setup a corporation. The client wants to offer non-physio services as well which their governing body does not allow. Therefore, their lawyer has suggested that a general corporation be setup where all the activity occurs ( invoicing patients rent etc.) - the general corporation is owned personally by the two individuals (50% each).
Each of the two Physiotherapists would then setup a professional corporation, which would then invoice the general corporation. The idea is that there would be a service agreement in place between the professional corporations and general corporation which allows for non-physio services to be provided.

My question is whether anyone in the forum has come across this or whether there are any tax risks associated with this?

2

Yes, I’ve come across it. It’s more work all around, they need a solid shareholder agreement between each other, and then each has an additional corporate tax return to do, so it costs them that additional headache, plus all the bookkeeping invoiced, which has to impeccable.