The Professionals Practice Group at Siskinds has extensive experience dealing with many different legal issues that accountants face throughout their careers, both professionally and personally. We understand that each stage of an accountant’s career will attract different legal needs and considerations. The needs of a newer accountant are different than those of an accountant who is in the middle of his or her career, or one who is nearing retirement from practice. As busy professionals, accountants may experience rapid change as their careers and personal circumstances advance. We recognize the unique legal and business requirements that accountants are faced with, and our experience in advising accountants on a variety of legal issues allows us to offer a comprehensive, multi-disciplinary suite of services tailored to assist accountants throughout their personal life, their career, and into retirement.
Some of the specific legal services we provide, tailored to accountants, include:
- incorporating, organizing and maintaining a professional corporation or corporations
- regulatory compliance with the Chartered Professional Accountants of Ontario (“CPA Ontario”)
- corporate reorganization and restructuring
- partnership, cost-sharing, and shareholder agreements
- commercial and residential real estate and leasing
- employment matters
- high net worth estate and succession planning
- wills and powers of attorney
- cyber security and privacy
A significant number of accountants choose to operate their practice through a professional corporation (“APC”) under the Ontario Business Corporations Act and the Chartered Professional Accountants of Ontario Act. Once an APC is incorporated, it must register with CPA Ontario and obtain a Registration Certificate in order to practice. If the APC intends to practice public accounting in Ontario, then a Certificate of Authorization issued by CPA Ontario is also required. To obtain a Certificate of Authorization, at least one shareholder of the APC must hold an active public accounting license (“PAL”), which needs to be renewed annually, at least 30 days prior to its expiration on October 31 of each year. If the PAL is not renewed, the Certificate of Authorization will be cancelled, and the APC will no longer be permitted to engage in public accounting.
An APC has an obligation to notify CPA Ontario of any significant changes to the practice, composition or structure of the APC prior to or within 30 days of such change. A significant change may include a change to the firm name, the shareholders, director, officers, articles of incorporation or dissolution of the APC. Failure to notify CPA Ontario of any such change may result in a revocation of the Certificate of Registration, and the APC may no longer be permitted to practice.
The name of the professional corporation must comply with the requirements under the Ontario Business Corporations Act as well as the bylaws and regulations of CPA Ontario. Prior to incorporating an APC, it is recommended by CPA Ontario that the proposed name of the professional corporation be submitted for pre-approval. In order to obtain pre-approval of a firm name, it is necessary to submit an application to the Registrar through the portal on the CPA Ontario website, and specific information with respect to the professional corporation must also be provided including the name of the members associated with the firm.
We routinely advise accountants on matters involving the incorporation, creation and maintenance of a professional corporation, to ensure regulatory compliance with CPA Ontario, laws and regulations. The professional’s relationship with his or her professional corporation will be as an employee. We assist in preparing an employment agreement that will provide flexibility on choosing compensation arrangements. However, the accountant still has personal professional responsibility to his or her clients.
Incorporating a professional corporation can bring significant advantages, including being taxed at a lower corporate tax rate compared to a personal tax rate, the payment of dividends to shareholders, and tax deferral strategies. We routinely provide advice to accountants about what types of shares may be issued to shareholders. Only an accountant who is licensed by CPA Ontario may hold shares in the APC. However, the shares of an APC may be held by a holding corporation provided all shares of the holding corporation are held by individuals holding licenses issued by CPA Ontario. We work directly with tax advisors and accountants to ensure that the most appropriate corporate structure is established in order to achieve long term goals.
Accountants will often seek advice on estate planning. As accountants progress in their careers, the planning process becomes more complex and we routinely work with our clients and their advisors to address the development of a clear plan. A key component of the estate plan will be the preparation of wills and powers of attorney. Since the majority of accountants practice through a professional corporation, it may be advisable to have dual wills, which is an effective estate planning strategy used to protect certain eligible assets from estate administration tax, or probate. Shares in a private corporation do not commonly attract a requirement for probate. Engaging dual will strategy allows for the creation of a secondary will with respect to the shares and shareholder loans of the professional corporation to ensure that the professional corporation, as well as other eligible assets, are protected from estate administration tax, which would not be the case if only one will was used. The benefit of dual will strategy is quite desirable for accountants who practice through a professional corporation, especially as over time a significant portion of their net worth may be held by the professional corporation.
If you would like to discuss your estate plan with us, please contact us and we will be happy to schedule an initial planning meeting.
Retirement and Succession Planning
As accountants approach retirement, there are many considerations to be made regarding the development of an effective succession plan for their accounting practice. Accountants may have the opportunity to sell their practice, or they may decide to change their professional corporation into an investment holding company in order to hold the assets that have accumulated within the professional corporation. The most beneficial way to handle these assets depends on the amount and type of assets remaining in the professional corporation upon retirement. If the professional corporation is to be re-characterized as an investment holding company, it will be necessary to notify CPA Ontario and to file articles of amendment to remove the specific elements that are unique to a professional corporation. If the APC is a partner in a firm, this fact will also affect the retirement process which may be governed by a partnership agreement. We routinely assist accountants with the development and execution of their succession plan and help identify the most beneficial options available to them in order to ensure a smooth transition into retirement.
Other Legal Needs
As accountants continue in their careers, there are many other legal needs that they will likely encounter such as leasing or purchasing an office or practice space, hiring employees, entering into agreements with other accountants, partnership agreements, shareholder agreements, intellectual property issues, as well as purchasing or selling an existing practice.
For more information on our services or how we can help, please feel free to contact us.