Can your spouse be a shareholder in your medical corporation
Key takeaways
- Voting shares of a BC medical corporation must be owned by eligible physicians only.
- Non-voting shares may be held by family members, including a spouse.
- Alberta allows spouses, common-law partners, and children to hold non-voting shares.
- Even if your spouse can hold shares, TOSI limits how much income can be split through dividends.
BC medical corporation share rules
The College of Physicians and Surgeons of BC requires that voting shares of a medical professional corporation be owned by eligible licensees, physicians who are in active practice. The corporation’s name must be approved by CPSBC, and the corporation must hold a permit under the Health Professions Act.
Voting shares: only physicians may hold them.
Non-voting shares: may be held by family members of the physician shareholder, including a spouse. This allows a spouse to participate in the corporation’s equity without controlling it.
Alberta medical corporation share rules
The College of Physicians and Surgeons of Alberta requires that the physician hold active registration and be the voting shareholder. Spouses, common-law partners, and children may hold non-voting shares. A retired physician cannot hold a professional corporation permit.
| Province | Voting shares | Non-voting shares |
|---|---|---|
| BC | Physicians only | Family of the physician |
| Alberta | Physicians only | Spouse, partner, children |
Why share ownership matters for tax planning
Being a shareholder is the first step to receiving dividends. If your spouse cannot hold shares at all, dividend-splitting is off the table. If your spouse can hold non-voting shares, dividend-splitting is possible in principle, but TOSI still applies.
TOSI taxes dividends paid to a spouse at the top rate unless an exception applies, the 20-hour rule, reasonable return, or age 65. Even with shares in hand, the TOSI rules limit how much income can actually be split.
What about the 20-hour rule and non-voting shares
If your spouse holds non-voting shares and works in the practice an average of 20 hours per week, dividends paid to them are TOSI-free under the excluded-business exception. This is a common structure: the spouse works in the office, holds non-voting shares, and receives dividends that reflect both their ownership and their work.
If the spouse does not work in the practice, the age-65 exception is the only reliable route to TOSI-free dividends. Below 65, a spouse who does not work can only receive a reasonable-return dividend, which is limited.
Why this matters: many doctors incorporate and put their spouse on as a non-voting shareholder without understanding the TOSI limits that follow. The share structure is only the first step. The tax treatment of dividends is a separate, more restrictive question.
Frequently asked questions
Does my spouse need to be a shareholder to receive dividends from the medical corporation?
Generally, yes. Dividends are paid to shareholders. If your spouse does not hold shares, the corporation cannot pay them a dividend directly.
Can my spouse be a director of the medical corporation?
Provincial rules vary. In BC, all directors and officers of a medical professional corporation must be licensees. Check with your College before appointing a non-physician as a director.
If my spouse gets non-voting shares, can they also be employed by the corporation?
Yes. A spouse can be an employee and a non-voting shareholder. Salary and dividends are separate streams: salary for work done, dividends for capital invested.
Does the age-65 exception apply to my spouse’s shares?
Yes. If your spouse is 65 or older and holds shares, dividends paid to them are exempt from TOSI regardless of their involvement in the practice.
Can my children hold non-voting shares in my medical corporation?
If the College’s rules allow family members to hold non-voting shares, your children may be included. But TOSI will apply to dividends paid to minor children unless an exception is met, and the attribution rules may also apply if the shares were gifted.
Talk to us about your corporate structure at ghumans.ca/doctors.
General information only. Talk to us about your situation.