CPA Professional Corporation in Ontario
What Ontario chartered professional accountants need to know before incorporating their practice.
A CPA professional corporation lets an Ontario chartered professional accountant carry on their practice through a corporation, registered with CPA Ontario. Only CPAs licensed by CPA Ontario may hold shares, and to practise public accounting the corporation needs a certificate of authorization with at least one shareholder holding a public accounting licence. It aids tax planning, not liability protection.
Regulated by: CPA Ontario (Chartered Professional Accountants of Ontario)
Certificate of authorization for public accounting
To practise public accounting through a professional corporation you must obtain a certificate of authorization from CPA Ontario, and at least one shareholder must hold (or apply for) a public accounting licence. The certificate is renewed annually. If all engagement reports are issued and signed by another firm with a licensed lead engagement person, a certificate may not be required.
Who can own shares
Only an accountant licensed by CPA Ontario may hold shares in the professional corporation. The corporation must also be registered as a firm with CPA Ontario. Share ownership is restricted to eligible CPAs rather than family members or outside investors.
Naming and firm-name approval
The corporate name must indicate the profession and end with "Professional Corporation," and CPA Ontario pre-approves the firm name before you register. As with other professions, a numbered name is not appropriate for the professional corporation used in practice.
Public accounting licence must stay current
Where the corporation practises public accounting, at least one shareholder must hold an active public accounting licence, renewed each year (by 30 days before its October 31 expiry). Letting the licence lapse can put the certificate of authorization at risk.
What it does not protect
A CPA professional corporation does not shield you from personal liability for your own professional negligence. You remain accountable to your clients and to CPA Ontario, and professional liability insurance is still required. Incorporating is about tax and structure, not immunity from claims.
Tax benefits and setup
Income retained in the corporation is generally taxed at the lower small business rate, supporting tax deferral and income planning. Setup involves CPA Ontario name pre-approval, incorporation under Ontario's Business Corporations Act (government fee about $300), firm registration, and the certificate of authorization where public accounting is done. Markham Office can handle the incorporation and registrations.
Frequently asked questions
- Do I always need a certificate of authorization?
- You need one to practise public accounting through the corporation. If all engagement reports are signed by another firm with a licensed lead engagement person, a certificate may not be required.
- Can non-CPAs or family members own shares?
- No. Only accountants licensed by CPA Ontario may hold shares in the professional corporation.
- Do I have to renew anything each year?
- Yes. The certificate of authorization is renewed annually, and any required public accounting licence must be renewed each year before its October 31 expiry.
- Does incorporating protect me from client claims?
- No. You remain personally liable for your own professional negligence, so professional liability insurance is still needed.
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