A **Personal Real Estate Corporation (PREC)** is created through **provincial incorporation**, requiring submission of the necessary documents and payment of applicable fees to the provincial government. The incorporation process includes drafting the **articles of incorporation**, which outline the company’s name, structure, and operational rules. While the PREC is a separate legal entity, the real estate professional remains personally responsible for ensuring compliance with real estate licensing requirements.

The PREC must specify its business purpose as **real estate trading**, and the licensed real estate professional must be the **controlling shareholder**. This structure allows the professional to receive earnings through the corporation rather than personally, enabling tax deferral and potential income-splitting opportunities within legal limits. However, the corporation itself does not receive independent real estate licensing—it operates under the agent's individual license.

The **share structure** of a PREC is an important consideration. While the licensed real estate professional must own all voting shares, non-voting shares may be held by family members for income-splitting purposes. Additionally, the articles of incorporation outline any limitations on corporate borrowing, the issuance of additional shares, and the rights and responsibilities of shareholders.

Since a PREC is a **private corporation**, its shares are not publicly traded. However, it must comply with ongoing reporting obligations, such as **annual filings** with the provincial business registry and updates regarding changes in directors, shareholders, or registered office addresses. The real estate professional must also ensure that the corporation remains in good standing with the **provincial real estate regulatory body**.

A **PREC must be registered in each province where it operates**. In **Ontario**, this can be done at the time of incorporation. Other provinces may require a separate registration process. The real estate professional must maintain active licensing and remain affiliated with a brokerage while operating the PREC.

At least one incorporator must sign the **articles of incorporation**, along with documents stating the **initial registered office address** and the members of the first **board of directors**. Any changes to corporate information must be reported within set timeframes, and an **annual return** must be filed to update provincial business registries. This ensures transparency in ownership and regulatory compliance.