Start a PREC in B.C.

A Personal Real Estate Corporation (PREC) allows a real estate agent to earn their business income through a corporation. It is formed by a single real estate agent and can provide huge tax benefits for agents. Personal real estate corporations may only provide real estate or ancillary services (real estate transaction-related services) as their main form of business. The real estate salesperson owning the PREC license must be the sole voting shareholder, as well as the sole director/officer of their personal real estate corporation.

What are the advantages of forming a Personal Real Estate Corporation?

• Tax deferral for life and retirement planning purposes.
• Reduction/elimination of Canada Pension Plan (CPP) contributions
• Income splitting with family members under certain circumstances to reduce family tax.
• This format is good for limited liability which means the owners' personal assets are protected from liabilities.

Who can form a PREC?

• Licensed Real estate agents who wish to receive their brokerage remuneration through a corporation can form a PREC.

Real Estate Services Regulation requires that the legal name of a personal real estate corporation must include both, but nothing other than:

1. The legal name, a recognizable short form of the legal name, or the licensee name of the controlling individual; and
2. The term personal real estate corporation
Example: Janiel Smith Personal Real estate Corporation.

B.C Registries provide a priority processing of incorporation for an additional fee. In priority queue, your corporation can be registered in3 business days while a non-priority queue can take up to 25 business days. Once we receive the name approval, we will proceed to incorporate your business with that name.

Incorporators prepares documents, fill forms and submit for incorporation. Once the company is incorporated, they have no role in it. Directors supervising the activities of the corporation and makes decisions. Typically all directors must be incorporators.

Note: Select Two classes of shares only if you want to include your spouse or other family members as non-voting shareholders in the corporation.