Professional incorporation · Real estate
A PREC is a BC corporation through which a real estate licensee can receive commission income — taxed at corporate rates rather than personal rates. The BCFSA framework is stricter on share ownership than the medical, dental, law, or CPA equivalents, and we set the structure up to satisfy both BCFSA and the CRA.
The structure
BCFSA's PREC rules are tighter than the rules other regulators apply to professional corporations. Three differences worth knowing at the start:
Share ownership. The controlling licensee must hold all voting shares.
The PREC does not replace the personal licence. The licensee continues to be personally licensed under the Real Estate Services Act. The PREC sits on top of the licence as a billing vehicle for commissions — it is not a substitute for the licence and does not change what the licensee is permitted to do.
The corporate name has to be very specific. BCFSA requires the legal corporate name to include the licensee's full legal name and the words "Personal Real Estate Corporation". Marketing names different from the legal corporate name can be registered separately as trade names.
The process
We confirm the proposed corporate name with BCFSA before filing the BC company. This avoids the case where the BC name is cleared but BCFSA declines to approve it as a PREC.
Standard BC incorporation, with the share structure tailored to PREC rules: voting common shares for the licensee, non-voting shares for permitted family members or family trusts where the income-splitting math works.
Application form, supporting documents (corporate documents, share register, declarations from the licensee), application fee. BCFSA reviews; most files clear without follow-up.
On approval, the licensee notifies their brokerage of the PREC. The brokerage updates its records and trust accounting so commissions can be paid to the corporation.
Commissions for transactions completed after the changeover date flow to the PREC. Banking, accounting, and tax-filing arrangements are updated. The accountant takes over from this point on the financial side; we stay involved on the corporate maintenance and the annual BCFSA filing.
Frequently asked
A Personal Real Estate Corporation (PREC) is a BC corporation through which a licensed real estate licensee can receive remuneration for licensed services. The PREC framework is governed by the BC Financial Services Authority (BCFSA) under the Real Estate Services Act and its Rules. PRECs differ structurally from medical, dental, law, and CPA corporations — the share-ownership rules are tighter, and only one licensee can be the controlling shareholder of a given PREC.
Two main drivers: tax planning, and limited liability — the corporation is a separate legal person, which can shield personal assets from business obligations (subject to the limits BCFSA imposes on professional liability for the licensee personally). Incorporation has tax obligations and tax consequences, and the decision should be confirmed with the licensee's accountant. Based on our understanding, once commission income passes a certain threshold above what the licensee needs for personal living costs, incorporating can become more advantageous for tax reasons — earnings retained in the PREC are taxed at corporate rates rather than personal rates. The threshold and the math are specific to the licensee. Confirm with your accountant before incorporating.
The controlling licensee must hold all voting shares.
Yes. The PREC does not replace the licensee's personal licence — both are required. The licensee continues to be personally licensed under the Real Estate Services Act, and the PREC is separately registered with BCFSA so commissions can be paid to the corporation. The PREC is essentially a billing structure on top of the licensee's existing licence; it is not a substitute for the licence.
BCFSA requires the corporate name to include the licensee's legal name and the words "Personal Real Estate Corporation" (or an approved variation). A common form is "Jane Smith Personal Real Estate Corporation". Marketing names different from the legal corporate name can be registered separately. The name has to clear both BC Registries and BCFSA before the PREC is set up.
The BC company can be filed in 1 to 3 business days. BCFSA approval as a PREC typically takes another 2 to 4 weeks after the application is submitted. The licensee cannot receive commissions through the PREC until BCFSA approval is granted. We co-ordinate the timing — usually the BC company is filed first (with a corporate name pre-cleared with BCFSA) and the PREC application is submitted promptly after.
Yes. Until BCFSA has issued the PREC approval, commissions continue to flow to the licensee personally as before. Once the PREC is approved, the licensee notifies their brokerage, the brokerage updates its records and trust accounting, and commissions begin flowing to the PREC for licensed work performed after the changeover date.
Annual filings with BCFSA to confirm the corporation continues to meet the rules (controlling licensee unchanged, share ownership compliant, name still compliant). Annual report to BC Registries to keep the corporation in good standing. CRA tax filings. Minute book maintenance. The PREC's standing is tied to the licensee's standing — if the licensee's personal licence lapses, the PREC's status is affected.
Tell us your full legal name (for the BCFSA pre-clearance), whether your spouse, children, or parents will hold non-voting shares, and your timeline. We'll come back with a quote covering the BC company, the BCFSA application, and the minute book.