Many physiotherapists launching their own clinic or moving into private practice often wonder: should I Incorporate Your Physio Practice right away? It feels like the professional thing to do—after all, isn’t that what ‘real’ businesses do?

I’ve seen too many clinic owners rush into incorporation because of advice they found online or from someone who didn’t fully understand their situation. What they often end up with is a corporation that costs them more to maintain than if they had simply remained a sole proprietor.

On average, incorporation adds about $2,000 per year in accounting and compliance costs—before you even factor in any legal setup or admin.

First things first: Get advice. Real advice.

Talk to a professional. More importantly, ask them to explain why they think you should (or shouldn’t) incorporate. This decision depends on your specific facts:

Are you running a solo practice out of a shared space?

Do you have multiple practitioners working under you?

Do you have significant surplus income?

If someone tells you to incorporate without asking questions about your setup, your income, or your future plans, that’s your cue to find another advisor.

Two Big Things to Think About:

1. Tax Considerations (When the Numbers Start to Work)

Here’s the short version:
Corporations are taxed at a lower rate than individuals. That means:

  • You keep more money inside the business if you don’t need it all to live on.
  • You can defer personal tax by leaving retained earnings in the company.
  • You have more control over your income, which helps with tax planning and retirement savings.

So, when should you think about incorporating as a physio?

When you’re earning more than you need to live on.
If you can comfortably pay yourself and still have profit left over, it might be time.

Also consider your retirement plans. Corporations can be powerful tools to build long-term savings, if used strategically. You can invest retained earnings, create holding companies later, or plan for succession—all things that become available once you’re incorporated.

2. Legal Considerations (and Risk Management) 

Let me be upfront: I’m not a lawyer.

What I tell clients is this—assess your risk. In physiotherapy, this might mean:

Hands-on treatments that carry a small but real liability.

A clinic space where clients may slip or get injured.

Employing multiple contractors or staff.

A corporation is a separate legal entity. It can offer some protection, but insurance is usually your first line of defense.

So here’s what I suggest:

  • Think about your risk tolerance.
  • Talk to an insurance professional.
  • If you still feel uncertain, then talk to a lawyer.

Some sole proprietors get peace of mind from professional liability and general business insurance alone. Others feel more secure knowing they have a corporate shield. It’s a personal decision—but one that should be informed from information provided by professionals.

Timing Is Everything

This is not a race.

Incorporation should be based on your:

  • Risk tolerance
  • Clinic growth
  • Financial goals

You can always Incorporate Your Physio Practice later, but undoing it is far more complicated—and often more expensive.

Final Tip: Don’t DIY Your Incorporation 

I say this with love: while it’s tempting to go solo, don’t try to Incorporate Your Physio Practice on your own.

I’ve seen far too many cases where DIY incorporations create messy minute books, incorrect tax elections, or ownership structures that need to be fixed later—at a much higher cost.

See a lawyer. Last time I checked, a basic legal incorporation was quoted at around $1,500.

And remember: if $1,500 feels like too much to invest, you should really consider whether incorporation is the right move at this stage. Because once you’re incorporated, you’ll likely be paying at least $2,000 more annually for tax filings and legal compliance.

Final Note

This blog is meant to give you a general understanding—it’s not a substitute for direct advice. Legal and accounting fees can vary depending on where you are and what you need. If you’re considering incorporation or just want to run the numbers with someone who understands your type of practice, we’d be happy to help.

Contact Virtual Heights Accounting—we help physiotherapists build smart financial systems, not just file returns.