For dental associates
Incorporation for dental associates in Quebec
Incorporation is not reserved for dentists who own a clinic. An associate can also practise through a professional corporation and, when it is properly planned, keep more of each year's income invested.
Its value, however, depends on what the dentist earns, what needs to be withdrawn and what is done with the balance.
Dentist incorporation in Quebec
Incorporation at a glance
Since 2008, dentists in Quebec have been allowed to practise their profession through a corporation, under the conditions set by the Ordre des dentistes du Québec ("ODQ"). Incorporating means creating that corporation, a separate legal person with its own name, its own bank account and its own tax returns, and then practising dentistry through it.
The patients, the clinics and the dentist's professional responsibilities do not change. What changes is that the income from the dentist's work is earned by the corporation rather than by the dentist personally, and that one change is what opens the door to tax planning.
This right is not limited to dentists who own a practice. An associate, paid by one clinic or by several, can incorporate in exactly the same way.
The important question is therefore not whether the dentist owns a clinic. It is whether their earnings, personal cash needs and longer-term plans make a corporation useful, and whether the corporation is structured to support the way they practise today without limiting the decisions they may make later.
The sections that follow explain the professional corporation, the rules that govern it and the tax deferral it creates, with an example in numbers and what can be done with the money left in the corporation. They then turn to the right timing, to the choice between salary and dividend, and to why the way an incorporation is planned matters as much as the incorporation itself, before walking through each step, its timeline and the obligations that continue afterwards.
The cost of waiting
Personal income tax without a corporation
Incorporation should not be something to think about later. Without a corporation, professional income is generally taxed personally in the year it is earned, whether it is needed to live on or would otherwise be saved and invested.
Personal tax rates rise with income, and a dentist's income can reach the highest brackets quickly. In 2026, the combined federal and Quebec marginal rate exceeds 47% on taxable income above $132,245 and reaches 53.31% above $258,482, thresholds that are indexed each year.
Combined marginal rate · 2026
On taxable income above $132,245, indexed each year.
Top combined marginal rate · 2026
On taxable income above $258,482, indexed each year.
These are marginal rates: they apply to the income within each bracket, not to every dollar earned. The distinction matters, since what a corporation changes is the tax on the last dollars earned, the ones taxed at those top rates.
A corporation opens a different path for the income that does not need to be withdrawn right away. Rather than being taxed personally at once, that income can be retained in the corporation, after corporate tax, for future investment or planned withdrawals.
That timing advantage, not the elimination of tax, is the central financial reason to incorporate.
The professional corporation
The professional corporation
A professional corporation is the corporation through which a dentist practises once the ODQ's requirements are met.
Forming the corporation and obtaining the right to practise through it are two distinct steps: the corporation is first legally constituted, and the dentist must then satisfy the ODQ's requirements before practising through it.
From then on, the corporation bills the clinics where the associate works and receives the professional fees, while the dentist continues to treat patients. A single corporation is enough, even for an associate who works in several clinics, since each clinic simply pays the same corporation for the work done there.
Step one
The corporation is constituted
It is created under Quebec or federal corporate law, with the conditions the ODQ requires written into its articles.
Step two
The ODQ's requirements are met
The declaration is filed with proof of the corporation's existence and registration and of its professional liability coverage.
From then on
The corporation earns the dental income
Every clinic pays the same corporation, and the dentist continues to treat patients.
Unlike an ordinary business corporation, a dental corporation is governed by the rules of the profession:
- Professional Code
- CQLR, c. C-26
- Dental Act
- CQLR, c. D-3
- Regulation respecting the practice of the dental profession within a limited liability partnership or a joint-stock company
- CQLR, c. D-3, r. 9
These rules govern who may hold its shares, who may manage it, the professional liability coverage it must carry and the declarations it must file with the ODQ. All of the voting shares must be held by dentists, which means the associate remains in full control of the corporation, and only dentists may act as its directors and officers (D-3, r. 9, s. 3).
Quebec or federal incorporation.A dentist can generally incorporate under Quebec's Business Corporations Act (CQLR, c. S-31.1) or under the federal Canada Business Corporations Act (R.S.C. 1985, c. C-44). For a dentist whose practice is in Quebec, a Quebec corporation is often the practical choice.
A federal corporation remains possible, but it must still be registered in Quebec, and the ODQ's rules apply to it in the same way (D-3, r. 9, s. 4).
The corporation's name.A corporation can be created with a number or with a name. A dental corporation may add to its name the words "firm of professionals governed by the Professional Code" ("FPGPC") (D-3, r. 9, s. 11), and its name is declared to the ODQ along with its shareholders and establishments.
We review the proposed name and the structure before filing, to avoid corrections and delays later.
A separate taxpayer.The corporation has its own bank account, records and tax filings. The income it earns is generally taxed in the corporation until it is paid to the dentist, at which point the personal tax rules also apply.
That separation is what makes the tax deferral possible, and it is also the source of the additional administration that incorporation brings.
Tax deferral
The tax deferral
The financial benefit of incorporation becomes clear when one considers what happens to the income the dentist does not need for personal expenses.
Earned personally, that income is taxed in the same year. Earned by the corporation, it is taxed at the corporate rate, which is much lower, and personal tax is paid only when the money is eventually taken out. That difference in when personal tax is paid is what is called a tax deferral.
The corporate rate is the rate the corporation pays on the income it earns from the dentist's practice. In 2026, for a dental corporation with no employees, which is the situation of most associates, that rate is about 20.5% on the first $500,000 of income: 9% at the federal level, thanks to the small business deduction (s. 125 of the Income Tax Act), and 11.5% in Quebec.
Quebec also offers a reduced rate for small businesses, but only where at least 5,500 hours of work are done for the corporation in the year, which is more than one dentist working alone can reach. The consequences of that rule are explained in the section on salary and dividends.
The deferred tax does not disappear. The advantage is having more capital available to invest before a later personal withdrawal, typically in a year when income is lower, during a parental leave or at retirement.
Whether that produces a meaningful long-term benefit depends on investment returns, the length of time the funds remain in the corporation, the tax on their later withdrawal and the cost of maintaining the structure.
Tax deferral is a planning tool, not a promise of permanent tax savings.
Tax deferral in numbers
Incorporated versus not incorporated: an example
The following simplified comparison takes an associate who earns substantially more than is needed for current personal spending, and isolates the $100,000 that could either be earned personally or retained in a corporation. It illustrates the timing difference, not a permanent saving.
Case study
An associate earns $400,000 a year and needs $300,000 before tax for their lifestyle, savings and debt payments. The remaining $100,000 is not needed right away.
Not incorporated
- The $300,000 needed
- Taxed personally at the progressive rates
- Tax on the remaining $100,000, at the top combined rate of 53.31% (2026)
- about $53,300
Left to invest from the $100,000about $46,700
Incorporated
- The $300,000 needed, paid as a salary
- Taxed personally at the progressive rates
- Tax on the remaining $100,000, in the corporation at about 20.5% (2026)
- about $20,500
Left to invest from the $100,000about $79,500
For illustration only. The figures are rounded and simplified (they leave out expenses and Quebec Pension Plan contributions), use 2026 rates, and do not reflect any particular dentist's situation.
The additional $32,800 is not a permanent tax saving. It is a larger amount available within the corporation, on which personal tax will be paid when it is withdrawn, and until then it remains invested and grows.
Actual results depend on deductible expenses, the corporate rate that applies, compensation choices, contributions and the timing of withdrawals.
The relevant question is how much is retained over time after all taxes and costs, not which column looks better in a single year.
Investing through the corporation
The money left in the corporation
The money left in the corporation does not sit idle. It belongs to the corporation, and the corporation can invest it in the same way an individual would.
01
Financial investments
The corporation can invest with the dentist's financial advisor, for example in mutual funds or in stocks.
02
Real estate
The corporation can also acquire real estate. In many cases, we recommend holding real estate in a separate company, and that is something we look at together.
The holding company
An incorporation structure does not have to include only one company. Depending on the numbers, it can combine the dental corporation with a holding company, and not every dentist needs one.
A holding company is a second corporation whose role is not to practise dentistry but to hold assets: investments, real estate or the shares of the dental corporation itself. It is called a holding company for exactly that reason, since it holds rather than operates.
When the numbers justify it, the dental corporation can pay its surplus to the holding company as dividends, which are generally received by the holding company without additional tax at that stage (s. 112 of the Income Tax Act), and the investments are then made in the holding company.
Keeping investments separate from the dental corporation keeps the professional activity and the savings apart, which can matter later, for example when a practice is bought or sold.
Like the dental corporation, a holding company that holds voting shares of the dental corporation must itself have all of its voting rights held by dentists (D-3, r. 9, s. 3). Whether a holding company is useful, and when, is something we look at during the consultation.
Timing
The timing of incorporation
There is no single income at which incorporation becomes the right decision for every associate. Some incorporate earning $100,000 a year and others at $500,000, and most professionals do so within one to two years of starting to practise.
Two dentists with similar billings can nevertheless reach different conclusions, since their living expenses, their debt and their plans for the next few years are different. The practical starting point is how much income can consistently be left in the corporation once personal obligations are met, as the deferral applies only to money that stays there.
That money is not in the dentist's personal account. To use it for a personal expense, such as a loan payment or the down payment on a home, it must first be paid out and taxed personally.
Incorporation also involves setup fees, annual filings and accounting costs, and those are weighed against the expected benefit from the start rather than treated as an afterthought. Three considerations come up with almost every associate.
01
Student debt
Student debt does not, in itself, stand in the way of incorporating. What matters is the amount owed, the interest rate on that debt, and how much is gained by leaving income invested in the corporation rather than paying it out to repay the debt faster.
02
A first home
Buying a first home does not necessarily stand in the way of incorporating either, and the two can be done at the same time. It is a question of numbers: the mortgage rates at the time of the purchase, the debt already carried, and what the corporation allows to remain invested.
03
Lifestyle expenses
When most of the income goes to lifestyle expenses, the deferral is small for now. Incorporating may then make more sense once income grows or expenses fall, and choosing that moment is part of the planning.
Example · Repaying $10,000 of student debt early with money from the corporation
- Amount needed personally
- $10,000
- Personal tax on a dividend at the top rate (2026)
- 48.70%
- Dividend the corporation must pay
- about $19,500
Conclusion. With a low-interest debt, it can make more sense to keep repaying it on schedule and leave the $19,500 invested in the corporation; with a high-interest debt, repaying it faster can come first. Where the line falls depends on interest rates at the time.
For illustration only. The figures are rounded, use the 2026 top rate, and do not reflect any particular dentist's situation.
These decisions are evaluated together rather than in isolation. Paying down debt, buying a home and building investment capital are competing uses of the same money, and the right balance depends on interest rates, cash-flow needs, the dentist's time horizon and appetite for risk.
It is not a black-and-white rule, and the answer changes from year to year with market conditions. That is why we look at each dentist's own figures before recommending a structure.
Compensation
Salary versus dividend
A dentist who is not incorporated has no choice between salary and dividend: all professional income is taxed personally, at the progressive tax rates, in the year it is earned.
Once incorporated, the dentist can plan how to be paid, and the corporation can pay them through a salary, through dividends, or through a combination of both, subject to the applicable legal and tax rules.
The two methods are not equivalent. Each one affects the corporation's deductions, the dentist's personal tax and access to certain contribution-based programs differently.
A salary
Employment income paid by the corporation to the dentist as its employee. The corporation deducts the salary in calculating its taxable income, so it pays no corporate tax on that amount.
The dentist then pays personal tax on the salary received from the corporation, at the progressive personal tax rates.
A dividend
A distribution paid to the dentist as a shareholder, out of earnings on which the corporation has already paid tax. A dividend is not deductible for the corporation.
For that reason, the personal tax rate on a dividend is lower than on a salary: it takes into account the tax the corporation has already paid.
| Salary | Dividend | |
|---|---|---|
| Deductible for the corporation | Yes | No, paid out of income already taxed in the corporation |
| Creates RRSP contribution room | Yes | No |
| Contributions to the Quebec Pension Plan ("QPP") | Yes, paid by the dentist and by the corporation | No |
| Counts toward benefits under the Quebec Parental Insurance Plan ("QPIP") | Yes | No |
| Source deductions (income tax and contributions the corporation withholds and sends to the governments) | Yes | No |
A combination of salary and dividends is therefore common, though not a universal formula, since only a salary creates RRSP contribution room. A typical combination provides enough salary to maximise the RRSP contribution, enough money personally to top up the Tax-Free Savings Account (TFSA), and then, where more is needed, additional salary or dividends.
The choice reflects both the amount the dentist needs personally and the benefits they want to preserve.
RRSP contribution room for a given year is 18% of the previous year's earned income, such as a salary, up to an annual limit. For 2026, that limit is $33,810, which requires earned income of $187,833 in 2025. The limit is indexed each year and reaches $35,390 in 2027.
TFSA room, by contrast, does not depend on income at all: the limit is $7,000 for 2026, also indexed.
A mix planned every year
For an associate, the right mix is never set once and for all. Quebec reduces its corporate rate for small businesses only where at least 5,500 hours of work are done for the corporation in the year, counting the hours of both its employees and its shareholders.
A dentist working alone through a corporation cannot reach that threshold, so the corporation is taxed at Quebec's general rate of 11.5% (2026). As a result, income that is taxed in the corporation and later paid out as a dividend can bear more total tax than the same income paid as a salary.
Paid out as a dividend
- Corporate tax, at about 20.5% (2026)
- $20.50
- Personal tax on the $79.50 dividend, at 48.70% (2026)
- $38.70
Total taxabout $59.20
Paid out as a salary
- Corporate tax (the salary is deductible)
- $0
- Personal tax at the top combined rate of 53.31% (2026)
- $53.31
Total tax$53.31
Conclusion. On money taken out right away, a dividend can cost more than a salary for an associate's corporation.
For illustration only. The rates are 2026 top combined rates and do not reflect any particular dentist's situation.
This does not make incorporation a cost. On the income paid out as a salary, the corporation pays no tax and the dentist is taxed at the same progressive rates as without a corporation.
The value of incorporation lies in what remains in the corporation: the years during which the deferred tax stays invested, and the freedom to choose when the money comes out, for instance in a year when income, and therefore the rate on dividends, is lower.
Rates also move over time, and the top rate on these dividends in Quebec rises from 48.70% in 2026 to 49.54% in 2027. The right compensation strategy is therefore measured by the combined result: corporate tax, personal tax, contributions, benefits and the capital left for future use.
A lower salary is not automatically a better outcome. That is why the mix is reviewed every year, with the dentist's accountant, according to income, needs and the rates in force.
Planning the incorporation
Not all incorporations are created equal
The legal documents that create a corporation are only the beginning.
For a dentist, the corporation must also be structured to meet the ODQ's requirements, and an incorporation prepared without them in mind may need amendments before the dentist can practise through it.
Beyond those requirements, building the corporation so that it serves the dentist, today and ten years from now, is a matter of planning. That is why we never create a standard corporation. Each incorporation is planned around the dentist's situation, and six subjects are always part of that planning.
Maternity and paternity
When a leave is in the plans, the incorporation and its timing are built around it.
Debt repayment
Student debt is weighed against what the corporation allows to remain invested, to decide how quickly it should be repaid.
Salary versus dividend
The starting mix is set together, in coordination with the dentist's accountant.
Insurance
Life, critical illness and disability insurance premiums can, under certain conditions, be paid by the corporation rather than personally, as explained below.
Share capital
Share capital is the set of share classes a corporation can issue and the rights attached to each class, such as voting rights and the right to dividends.
Separate classes make it possible, for example, to pay a dividend on one class without paying it on another, or to bring in family members or a trust later without changing who controls the corporation.
A future practice
The corporation is built to be flexible. If the dentist later starts or buys a practice, there is no need to start over: the same corporation can be used for the purchase or the start-up.
Insurance premiums paid by the corporation
Life insurance premiums can be paid personally or through the corporation. Paid through the corporation, they cost less, since they are paid with income taxed at the corporate rate rather than at the dentist's personal rate.
Certain conditions must be met, however, for the corporation to be allowed to pay them. We take those conditions into account when we build the incorporation, and we guide the dentist on how to set it up properly.
The same applies to critical illness and disability insurance: the corporation can pay those premiums rather than the dentist personally, provided certain conditions are met, and that has to be planned accordingly. That planning is part of the incorporation.
Paid personally
- Premium
- $1,000
- Top rate (2026)
- 53.31%
Income needed before taxabout $2,140
Paid by the corporation
- Premium
- $1,000
- Corporate rate (2026)
- about 20.5%
Income needed before taxabout $1,260
Conclusion. The same coverage requires much less of what the dentist earns.
For illustration only. The figures are rounded, use 2026 rates, and do not reflect any particular dentist's situation.
Timeline
The steps to incorporation
Incorporating with Meditax is done entirely virtually, and every document is signed electronically. From the first consultation to the ODQ's approval, the process usually takes about four to six weeks, although the timing depends on the information supplied and on the authorities involved.
- Week 1
Consultation and planning
We meet by videoconference or by phone and plan the incorporation together.
- Week 1
Information
The dentist completes the forms needed to prepare the incorporation.
- About one week
Creation of the corporation
We create the corporation with the government and receive its documents, about one week after the consultation.
- Less than two weeks in all
Minute book and ODQ forms
We prepare the minute book, the official record of the corporation (its articles, by-laws, resolutions and registers of shareholders and directors), delivered in electronic form.
We also prepare all of the ODQ forms and send everything for electronic signature. Our part of the work, from the consultation to this step, usually takes less than two weeks.
- Two to four weeks
Filing with the ODQ
We file everything with the ODQ on the dentist's behalf and follow up until approval, which usually takes two to four weeks.
- Meanwhile · about one week
Banking
While the ODQ reviews the file, the dentist opens the corporation's bank account, usually within a week. We also recommend a credit card in the corporation's name, so that business expenses are paid by the corporation.
- Four to six weeks in all
ODQ approval
The ODQ sends its approval letter to the dentist and to us. From that moment, the corporation can bill the clinics.
The durations are approximate and depend in part on the government and the ODQ.
After incorporating
After incorporation
Once the ODQ has approved the corporation, the practical transition begins.
The associate informs every clinic where they work and gives them the corporation's billing and payment details, since from then on the corporation bills the clinics and the clinics pay the corporation rather than the dentist.
The corporation's funds are kept distinct from the dentist's personal finances. The income is deposited into the corporation's bank account, and properly documented business expenses, such as continuing education, travel and accounting, are paid with the corporation's credit card, which keeps the bookkeeping simple.
Each year, the dentist and their accountant decide how much to take out as salary or dividends. Whatever is not taken out can be invested, having been taxed at the corporate rate rather than the personal rate.
The incorporation itself is done once, but the corporation is an ongoing structure. The responsibilities that come with it are manageable, but they are real, and three of them return every year.
Every year
Financial statements and tax returns
The dentist's accountant prepares the corporation's financial statements and its federal and Quebec corporate tax returns.
The accountantEvery year
Annual resolutions
Each year, the shareholders and directors must formally adopt certain decisions, such as approving the financial statements.
Once the financial statements are ready, the dentist sends them to us, and we prepare these annual resolutions, send them for electronic signature and keep the minute book up to date.
MeditaxBy March 31
Annual declaration to the ODQ
Every dental corporation must file an annual declaration with the ODQ by March 31, and we file it on the dentist's behalf.
MeditaxWe take care of the corporate legal side and the ODQ, while the accountant handles the accounting and tax filings. Defining those responsibilities from the outset is what keeps the corporation compliant and useful year after year.
Getting started
Starting an incorporation
Every incorporation begins with a consultation, by videoconference or by phone, built on the dentist's actual numbers and plans: income, personal spending, debt, major purchases, family and a practice of their own one day.
We assess whether incorporating makes sense now and explain the legal steps, the timing and the ongoing responsibilities before any decision is made. If it does make sense, we take care of everything from there, including every form with the ODQ.
Frequently asked questions
Frequently asked questions
Can an accountant or a general corporate lawyer incorporate a dentist?
A professional corporation involves more than filing articles of incorporation. Anyone can create a corporation with the government, but a dental corporation must also meet the ODQ's requirements: specific conditions written into its articles of incorporation (the document that creates the corporation), a declaration to the ODQ and the ODQ's approval before it can bill.
A corporation can be legally formed and still be unsuitable for professional practice until those requirements are met.
Above all, the way the corporation is structured (the shares, the mix of salary and dividends, the planning for a leave, debt repayment and a future practice) is legal and tax planning, which is what we do, specifically for dentists. The accountant remains essential: they prepare the financial statements and tax returns every year, and we work with them.
Does incorporating protect a dentist from professional liability?
No. Incorporation does not eliminate a dentist's personal professional responsibility for their own acts, and their professional liability coverage and ODQ obligations continue to apply.
What the law provides is that a dentist practising within a corporation is not personally liable for the corporation's obligations arising from another professional's faults (s. 187.17 of the Professional Code). That limited separation should not be confused with protection against professional negligence.
Are incorporation costs deductible?
There are ways to deduct the costs of incorporating. As of 2026, the Income Tax Act allows up to $3,000 of incorporation expenses to be deducted in the year they are incurred (s. 20(1)(b)), and we review this with each dentist at the time of incorporation.