Comprehensive Legal Services for Ontario REALTORS®, Brokers and Real Estate Professionals
A Personal Real Estate Corporation (PREC) allows eligible Ontario real estate salespersons and brokers to earn their commission income through a corporation while continuing to trade in real estate through their registered brokerage. PRECs were introduced under Ontario legislation to provide real estate professionals with many of the same corporate planning opportunities available to other incorporated professionals, while maintaining consumer protection and brokerage oversight under Ontario’s real estate regulatory framework. (Real Estate Council of Ontario)
At Levilex Lawyers, we provide a complete turnkey legal solution for establishing and maintaining your Personal Real Estate Corporation from start to finish.
Our lawyers regularly advise business owners, corporations, investors and entrepreneurs on incorporation, shareholder structuring, tax planning coordination, regulatory compliance and commercial law. We bring this same experience to Ontario REALTORS® looking to establish a compliant, efficient and properly structured PREC.
Rather than simply filing incorporation documents, we help build the legal framework that supports your business for years to come.
Our Complete PREC Setup Services
We assist Ontario REALTORS® with every legal aspect of establishing a Personal Real Estate Corporation, including:
Initial Eligibility Review
We first determine whether a PREC is appropriate for your circumstances by reviewing:
- your RECO registration status
- your brokerage relationship
- your existing corporate structure
- any holding companies already in place
- family ownership considerations
- tax planning objectives
- future business plans
- succession planning goals
- investment objectives
- asset protection considerations
Not every REALTOR® will benefit equally from incorporation. We work with your accountant where appropriate to ensure the structure aligns with your financial objectives.
Choosing the Proper Corporate Structure
There is no “one size fits all” PREC.
We help determine the most appropriate legal structure, including:
- standalone Personal Real Estate Corporation
- PREC with a holding company
- family ownership structures permitted by legislation
- trust ownership where appropriate
- future estate planning flexibility
- asset protection planning
- corporate investment planning
- succession planning
Our objective is to establish a structure that is both legally compliant and capable of growing with your business.
Incorporating Your Ontario Corporation
We prepare and file all required incorporation documents under the Ontario Business Corporations Act, including:
- Articles of Incorporation
- corporate name searches (if applicable)
- numbered corporations
- customized share structure
- director appointments
- officer appointments
- registered office
- corporate minute book
- initial resolutions
- organizational resolutions
- share subscriptions
- share issuances
- registers
- corporate records
Designing the Correct Share Structure
Unlike ordinary corporations, Ontario PRECs have very specific ownership requirements established under Ontario legislation.
We advise on:
- voting shares
- non-voting shares
- equity shares
- family ownership
- holding company ownership
- trusts
- dividend flexibility
- future estate planning
We ensure your corporation complies with applicable legislation while maximizing flexibility wherever legally permitted. (ontario.ca)
Reviewing RECO and TRESA Compliance
A Personal Real Estate Corporation is subject to numerous statutory requirements.
We ensure your corporation satisfies the legal requirements relating to:
- controlling shareholder requirements
- directors
- officers
- permitted shareholders
- brokerage relationships
- remuneration restrictions
- prohibited activities
- holding client funds
- advertising restrictions
- brokerage obligations
- notification requirements
- corporate governance
We also explain what a PREC can and cannot legally do under Ontario’s real estate legislation. (ontario.ca)
Brokerage Review
Most brokerages require their own PREC documentation before commissions can be paid.
We assist with:
- reviewing brokerage agreements
- reviewing commission agreements
- reviewing independent contractor agreements
- reviewing brokerage PREC policies
- negotiating amendments where necessary
- ensuring compliance with RECO requirements
Preparing the Mandatory Brokerage-PREC Agreement
Ontario legislation requires a written agreement between:
- the brokerage
- the REALTOR®
- the Personal Real Estate Corporation
We prepare or review these agreements to ensure they satisfy legislative requirements while protecting our client’s interests. (Real Estate Council of Ontario)
CRA Registrations
Although accountants often assist with tax matters, we coordinate with them regarding:
- Business Number registration
- HST registration
- payroll accounts
- corporate tax accounts
- WSIB considerations
- banking requirements
Minute Book Preparation
Every corporation requires proper corporate records.
We prepare:
- customized minute book
- registers
- directors’ resolutions
- shareholders’ resolutions
- share certificates
- organizational documents
- annual maintenance records
Banking Documentation
We assist with:
- banking resolutions
- signing authorities
- banking certificates
- certified corporate documents
- corporate searches
- lender requirements
Tax Planning Coordination
While we do not replace your accountant, we work closely with your tax advisors regarding:
- retained earnings
- dividend planning
- salary versus dividends
- passive investment considerations
- holding company structures
- family ownership
- succession planning
- corporate reorganizations
- future sale planning
Holding Companies
Many successful REALTORS® eventually establish holding companies.
We assist with:
- creating holding companies
- restructuring existing corporations
- rollover transactions
- share exchanges
- tax deferred reorganizations
- investment corporations
- asset protection
Asset Protection Planning
As your business grows, protecting accumulated wealth becomes increasingly important.
We advise regarding:
- separating operating assets
- investment corporations
- creditor protection planning
- corporate ownership structures
- family trusts
- succession planning
- estate planning coordination
Annual Corporate Maintenance
Once incorporated, corporations require ongoing legal maintenance.
We provide:
- annual resolutions
- corporate updates
- director changes
- shareholder changes
- registered office changes
- corporate amendments
- extra-provincial registrations
- corporate searches
- certificates
- minute book maintenance
Corporate Reorganizations
As your business evolves, your corporation may need restructuring.
We assist with:
- share reorganizations
- estate freezes
- butterfly transactions
- holding company rollovers
- corporate amalgamations
- continuances
- dissolutions
- corporate clean-up
Buying and Selling Real Estate Businesses
Many REALTORS® eventually purchase:
- teams
- brokerages
- commercial properties
- investment portfolios
Our business law and real estate teams provide comprehensive legal support as your practice grows.
Commercial and Residential Legal Support
As your legal advisors, we can also assist with:
- residential real estate transactions
- commercial real estate
- mortgage financing
- private lending
- joint ventures
- shareholder agreements
- employment agreements
- commercial leasing
- incorporations
- commercial contracts
- litigation
- collections
- estate planning
Why Choose Levilex Lawyers?
Setting up a Personal Real Estate Corporation involves considerably more than incorporating an Ontario corporation.
It requires understanding the interaction between:
- Ontario corporate law
- the Real Estate Council of Ontario (RECO) regulatory framework
- the Trust in Real Estate Services Act, 2002 (TRESA)
- Ontario corporate governance
- tax planning considerations
- brokerage requirements
- shareholder structuring
- succession planning
- ongoing corporate compliance
Our lawyers provide a coordinated legal solution that considers both your current practice and your long-term business objectives.
Whether you are newly licensed, an experienced REALTOR®, a broker, a team leader or building a long-term real estate business, we can establish a Personal Real Estate Corporation designed to support your professional success.
Our Typical PREC Setup Process
- Initial consultation and eligibility review.
- Review of your current brokerage relationship and RECO registration.
- Consultation with your accountant (if applicable).
- Determine the optimal corporate structure.
- Prepare Articles of Incorporation and customized share structure.
- Incorporate your Ontario corporation.
- Prepare the complete corporate minute book and organizational resolutions.
- Prepare or review the required brokerage–PREC agreement.
- Coordinate RECO notification requirements before commissions are paid to the corporation. (Real Estate Council of Ontario)
- Coordinate CRA registrations and banking documentation.
- Deliver your completed corporate records.
- Provide ongoing annual corporate maintenance, governance, restructurings and legal support as your business grows.
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