Business Structure for RMTs
Should You Incorporate Your RMT Practice or Stay a Sole Proprietor?
If you’re an RMT growing your practice, you’ve likely wondered whether you should stay a sole proprietor or take the next step and incorporate your business. The right choice depends on where you are in your career, how much you’re earning, and what your long-term goals look like. Let’s break it down.
The Sole Proprietor Route
Most RMTs start here — and for good reason. It’s simple, low-cost, and easy to manage.
Pros:
Less paperwork – You report your business income directly on your personal tax return (T2125).
Lower setup cost – No legal incorporation fees or annual corporate filings.
Fewer ongoing requirements – No need for corporate minutes, separate tax filings, or complex bookkeeping.
Access to small business deductions – You can still deduct expenses like oils, sheets, rent, insurance, continuing education, and equipment.
Cons:
No legal separation – You are your business. If something goes wrong, your personal assets could be at risk.
Higher taxes at higher income levels – As your profit grows, you could be paying more personal tax than if you incorporated.
Harder to split income – You can’t easily pay family members or defer income through dividends.
The Case for Incorporation
Incorporating creates a separate legal entity — your business becomes its own person in the eyes of the law. This can offer both tax advantages and protection, but it comes with added complexity.
Pros:
Limited liability – Protects your personal assets if your business faces legal issues (though professional liability insurance is still essential).
Tax deferral – The small business tax rate (about 12–13% in Ontario) is much lower than most personal tax rates. You can leave funds in the company and draw them later through salary or dividends.
Income splitting – With proper planning, you can pay family members who help in the business or share dividends with a spouse (subject to TOSI rules).
Professional image – Some clinics or clients see incorporation as a sign of growth and professionalism.
Business continuity – Easier to sell or pass on later, since the corporation holds contracts, assets, and goodwill.
Cons:
More paperwork – Separate tax return (T2), annual corporate filings, and bookkeeping.
Higher setup and ongoing costs – Incorporation fees, annual minute books, and possibly an accountant.
Funds aren’t “yours” – You can’t freely transfer money from the business account to personal without recording salary or dividends.
When Incorporation Starts to Make Sense
Incorporation can be worth it when:
You’re earning more than you need personally and can leave some profits in the business.
You’re working independently (not just as a contractor in a clinic’s system).
You want to grow, hire, or build a recognizable brand.
You’re planning to purchase equipment or lease your own clinic space.
You’re concerned about personal liability and want a buffer.
The Hybrid Stage
Some RMTs start as sole proprietors and incorporate later — and that’s completely normal. You can continue using your existing business name by registering it under the corporation, and transition your clients, bank accounts, and contracts as you grow.
If you’re just starting out or earning under roughly $80,000–$100,000, a sole proprietorship is usually simplest. If you’re growing, expanding, or consistently generating more than you need to take home each year, incorporation can save you taxes and offer protection — but it’s not a magic bullet.
Before deciding, talk to a CPA who understands RMT practices. The right structure depends on your income level, clinic setup, and personal financial goals.
Free Consultation
If you’d like to discuss your own situation — or get a “pulse check” on whether incorporation makes sense — PracticePulse offers free consultations for RMTs.
