Financial Planning for Incorporated Professionals
Specialized fee-for-service financial planning built around the unique complexity of a professional corporation, retained earnings, passive income rules, salary vs. dividends, and the corporate structures that most advisors don't fully understand.
Being incorporated creates financial complexity that standard financial planning doesn't address. You have a professional corporation or operating company accumulating retained earnings. Every year you face the salary vs. dividends decision. You may have (or should consider) a holding company. You've probably got more in your corp than you know what to do with, and a vague anxiety that the passive income rules are going to become a problem. Ocean 6 was built for exactly this situation.
The Problems We Solve for Incorporated Professionals
Too much cash building up in the corporation
Your accountant tells you the corp is profitable. Your investment account inside the corp is growing. But the passive income clawback rules are eroding your small business deduction advantage. We model the exact point where passive income starts hurting you and build a strategy (often using corporate-owned life insurance) to keep wealth compounding efficiently inside the corp.
Salary vs. dividends, every year
This is not a one-time decision. It depends on your personal tax bracket, RRSP room, CPP contributions, income splitting opportunities, and what's happening inside the corp. We run the analysis annually and recommend the optimal mix, including whether an RRSP top-up, bonus, or increased dividend makes sense for your specific situation that year.
Holding company, when and how
A holdco isn't always the answer. It depends on your income level, asset mix, estate goals, and timeline. We'll tell you honestly whether a holding company adds value in your situation, what it costs to set up and maintain, and how to use it, investment policy, inter-company dividends, and how it interacts with your estate plan.
Corporate-owned life insurance (COLI)
Life insurance owned by your corporation can be one of the most tax-efficient investment structures available to incorporated professionals, but only if it's the right product, the right amount, and structured correctly. We analyze whether COLI makes sense for you and compare it against other strategies on an after-tax basis.
CDA balance and tax-free dividends
The Capital Dividend Account lets your corporation pay dividends to you tax-free in certain circumstances. Most incorporated professionals don't know they have a CDA balance, let alone how to use it strategically. We track it, include it in your annual planning, and make sure you extract value from it at the right time.
Preparing for eventual business sale
The Lifetime Capital Gains Exemption (currently $1.25M per eligible shareholder) requires advance planning. Estate freeze structures, family trust creation, corporate purification, and share restructuring all take time to implement properly. If you're thinking about a sale within 5–10 years, the planning needs to start now.
Who We Work With
For Doctors & Physicians
BC physicians operating through a Medical Professional Corporation face passive income clawback, limited RRSP room from dividend compensation, and the financial complexity of practice wind-down. We address these specifically, not generically.
For Dentists
Dental professionals with Professional Dental Corporations typically accumulate significant passive assets over a 15–20 year career. We address corporate investment strategy, COLI, and practice succession planning, including selling to an associate or a corporate buyer.
For Lawyers & Partners
Lawyers at partnerships and professional law corporations face non-standard compensation structures, draw accounts, partnership buyouts, mandatory retirement requirements. We help partners understand their real financial picture and plan for the transition out of a large firm.
For Business Owners
Owner-operators typically have most of their net worth in the business. The plan must account for that concentration risk alongside the usual retirement and insurance needs, and for the eventual exit that will be the largest financial transaction of their life.
Our Process
Discovery Call, 30 min, no cost
We ask about your current structure, what's working, what isn't, and what decisions you've been putting off. You ask us anything. If it's a fit, we explain what a planning engagement looks like and what it costs.
Comprehensive Financial Plan
We build a full financial plan covering your corporate structure, compensation strategy, insurance, investments, and retirement. It coordinates your accountant and lawyer and gives every advisor the same map.
Implementation and Ongoing Advice
We implement the plan alongside you and your other advisors. Every year we review: salary vs. dividends, contribution room, insurance adequacy, and any changes to the tax rules that affect your strategy.
Frequently Asked Questions
When does it make sense to pay myself salary vs. dividends?
It depends on multiple factors that change year to year: your personal tax bracket, RRSP contribution room (salary creates room; dividends don't), CPP contributions (salary triggers CPP; dividends don't), your spouse's income, and whether you have minor children. There's no universal answer. We run the specific numbers for your situation annually and recommend the optimal mix, including whether a bonus, increased dividend, or RRSP top-up makes most sense that year.
What is a holding company and do I need one?
A holding company (holdco) is a separate corporation that owns shares in your operating company. Dividends flow from opco to holdco tax-free, and assets held in holdco are shielded from operating risks. A holdco makes sense if your opco is generating more after-tax income than you need personally and you want to accumulate wealth in a corporate structure. It's not worth the complexity if retained earnings are modest. We'll tell you honestly whether one adds value in your situation.
How should I invest the retained earnings in my corporation?
Corporate investments are taxed at approximately 50% on passive income in BC, so the after-tax return can be significantly lower than the headline return suggests. The investment strategy inside a corp needs to account for this. We typically use a combination of corporate-class funds (which defer distributions), COLI (which grows tax-sheltered), and direct equity investments managed for capital gains. The right mix depends on your timeline and whether you plan to extract money personally or at death.
What is the passive income tax rule and how does it affect me?
Under the passive income clawback rules, your corporation's access to the Small Business Deduction is reduced dollar-for-dollar when passive investment income exceeds $50,000/year. Above $150,000 in passive income, the full Small Business Deduction is lost, costing approximately $55,000/year in additional tax. Strategies to manage this include COLI (exempt policy growth doesn't count), electing capital gains treatment, and restructuring through a holding company.
How does a family trust work for an incorporated professional?
A family trust holds shares in your operating or holding company. Income allocated from the trust to adult beneficiaries (spouse, adult children) is taxed in their hands at potentially much lower rates. Trusts are also used to multiply access to the Lifetime Capital Gains Exemption on a business sale, each adult beneficiary holding qualifying shares through the trust gets their own $1.25M LCGE. Trusts need to be established well in advance of a sale to meet CRA's holding period requirements.
Is corporate-owned life insurance right for me?
COLI makes sense in specific circumstances: you have retained earnings building up that you won't need for 10+ years; you're facing the passive income clawback; and you have an insurable need. It is not a substitute for investing, the returns depend on the underlying investment options and cost of insurance. We do a side-by-side comparison of after-tax growth inside COLI vs. direct corporate investment over your specific timeline. We never recommend COLI because it's profitable for the advisor.
If you're a physician or dentist, the planning framework is similar but the regulatory context (Medical Professional Corporations, CPSBC rules, BC PHO restrictions on passive income) adds additional layers. We have a dedicated page that covers financial planning for doctors and dentists in Vancouver.
Book a Discovery Call
30 minutes. We'll focus on your corporate structure, what's working, and what decisions you've been putting off.
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