A PREC's books are a corporation's books. The company has its own bank account and its own ledger. Revenue is booked from the brokerage's commission statements, and every dollar that reaches the agent is recorded as salary, dividend or a shareholder-loan entry, whichever the CPA has chosen.
For Coquitlam agents the routine has to hold up through a year of uneven closings: a tower completing in City Centre one month, nothing firm the next. Below is how we set the books up, what the monthly close covers, and what the CPA asks for when the fiscal year ends. Where BC rules matter, we quote them and link the source.
What is a personal real estate corporation in BC?
A personal real estate corporation is a company licensed under the Real Estate Services Act so that a licensee can provide real estate services through it. The detailed rules sit in the Real Estate Services Regulation, and BCFSA explains them in its Personal Real Estate Corporation Guidelines.
The corporation must keep a fixed shape. Per section 10.3 of the Regulation:
- All voting shares are owned, legally and beneficially, by one individual, called the controlling individual.
- That person is the sole director, and the president as sole officer.
- Any non-voting shares belong to the controlling individual or an "affiliated person": a spouse, a child, or a corporation or trust owned by or for those people.
- The legal name contains the licensee's name and the words "personal real estate corporation", nothing else.
If the company stops meeting those conditions, section 10.7 says its licence "becomes inoperative". For the books, the share register and minute book are therefore part of the file, not paperwork the lawyer alone keeps.
What is a PREC allowed to do, and what is off limits?
A PREC exists to provide real estate services, and the Regulation is narrow about it. Section 10.6(1) lets the licensee be paid through the corporation only if, among other conditions:
"the real estate services provided by the personal real estate corporation are provided only by the controlling individual;"
"any other persons engaged by the personal real estate corporation are not licensees;"
"the personal real estate corporation does not conduct any business other than the provision of real estate services and ancillary services directly associated with the provision of real estate services"
BCFSA adds two practical points. First, remuneration comes only through the brokerage you are licensed with, and on a team the brokerage pays each member or their PREC separately, never through one teammate's corporation. Second, the exemptions that let an individual licensee manage their own or family rentals do not extend to a PREC: it "can only provide rental property management services to real estate it owns in its name through the brokerage with which the personal real estate corporation is licensed."
What that means for the ledger:
- Every revenue deposit should trace back to the brokerage. A payment from anywhere else gets flagged before it is coded.
- An unlicensed assistant can be paid by the PREC. A licensed colleague cannot.
- Side income goes elsewhere. Consulting fees, a rental, a stake in a presale: before any of these lands in the PREC, the CPA and your lawyer should read it against section 10.6(1)(e). Where surplus cash should be invested is the same conversation.
How do you set up the books for a new PREC?
Start the ledger on the first day the brokerage pays the corporation instead of you. The brokerage's statements show which entity was paid for each deal, so the cut-over date is easy to prove.
Set-up checklist:
- Bank and card in the PREC's legal name. One chequing account and one credit card, used only for the corporation.
- A separate ledger file. QuickBooks Online or Xero, with its own bank feeds. Personal accounts never connect to it.
- A chart of accounts built for agents. Gross commission, brokerage split, desk or franchise fees, transaction fees, marketing and staging, vehicle, phone, licensing and board dues, professional fees, payroll, and a shareholder-loan account.
- Sales tax accounts. If the PREC is registered for GST, the tax on each commission and on expenses is held in its own accounts so the return ties out. Our GST and PST filing service handles the returns.
- An opening balance sheet. Share capital, and anything the CPA agrees to move in from you personally, such as a vehicle, recorded at the values they set.
- A commission register. One row per deal: address, closing date, gross, split, fees, GST and net. It becomes the backbone of every later reconciliation.
What does a monthly PREC close involve?
A PREC close is the standard monthly bookkeeping routine with a few agent-specific steps:
- Gather the brokerage commission statements for every deal that funded during the month.
- Book each commission gross, with the split and each fee on their own lines, then match the net figure to the deposit.
- Reconcile the chequing account, the card and any line of credit to their statements.
- Code expenses with the receipt attached, and check vehicle costs against the mileage log.
- Record any money that went to you, in the form the CPA has set.
- Update the set-aside: GST collected, plus an income tax reserve at the percentage the CPA gives you.
- Send a short report by the 10th: deals closed, profit to date, GST owing, the reserve, and the shareholder-loan balance.
Here is why step 2 matters. Say a statement shows a $20,000 gross commission, a $2,000 brokerage share and a $500 transaction fee. The deposit is $17,500, plus GST if the PREC charges it. Book only the deposit and the PREC under-reports revenue by $2,500 while hiding $2,500 of costs. Profit looks the same, but the GST return and the CPA's analysis will both be wrong. The figures are illustrative.
How should money move from the PREC to you?
There are three common routes. Choosing the mix is tax planning, which belongs to your CPA. Recording each one properly is the bookkeeping:
| Route | What the books need |
|---|---|
| Salary | A payroll run with source deductions remitted to CRA, and a T4 after year-end |
| Dividend | A written directors' resolution, the declared amount booked on that date, and a T5 after year-end |
| Shareholder loan | Every advance or repayment recorded as it happens, with the balance shown on the monthly report |
Personal spending on the PREC card is a common leak. It goes to the shareholder loan at month-end, not to an expense account. If you plan to pay an assistant or run salary for yourself, our payroll management service sets the runs up inside the same file.
Where do trust deposits fit?
They don't, at least not in the PREC's ledger. Deposits on your deals are held in the brokerage's trust account and governed by BCFSA's trust account guidelines. We don't summarise those rules. They are the brokerage's to follow. The PREC records commission only when the brokerage releases it, and the commission statement is the source document.
What will the CPA need at year-end?
The CPA prepares the corporation's financial statements and its T2. They will ask for a file that already balances. Our year-end preparation work assembles it:
- Bank, card and loan reconciliations to the fiscal year-end date, with the statements attached
- The commission register, tied to the brokerage's annual earnings summary
- GST returns filed during the year, matched to the ledger's GST accounts
- A shareholder-loan continuity schedule: opening balance, each movement, closing balance
- Payroll summaries and T4s, dividend resolutions and T5s
- The mileage log and the vehicle's purchase or lease documents
- A list of anything flagged during the year, such as a deposit that didn't come from the brokerage
Hold the whole file for at least six years after the close of the last tax year it covers, per CRA's record-keeping guidance. For the full eight-week run-up, see the year-end checklist for Tri-Cities owner-operators.
What if you also own rentals or presales?
Plenty of Coquitlam agents hold a condo rental or a presale contract on top of the PREC. Given the Regulation's limit on PREC business, where those assets sit (personally, in a holding company, or elsewhere) is a structure decision for your CPA and lawyer. Wherever they end up, each gets its own records. Our posts on presale and assignment records and rental property bookkeeping for Coquitlam condo owners cover those files. The Coquitlam owner-operator's guide to bookkeeping shows how the pieces fit into one monthly calendar.
Questions owners ask
Can my brokerage still pay me personally once I have a PREC?
No. BCFSA's guidelines say that when you work through a personal real estate corporation, the corporation is the one providing the services, so the brokerage must pay the corporation. The PREC can then pay you, provided the Regulation's conditions are met.
Can my spouse hold shares in my PREC?
Only non-voting shares. Under the Real Estate Services Regulation, the licensee must hold every voting share, and non-voting shares may be held only by the licensee or an affiliated person, which includes a spouse or child. Whether to issue them is a call for your CPA and lawyer.
Can my PREC pay an assistant?
Yes, if the assistant is unlicensed. The Regulation says anyone else the PREC engages must not be a licensee, so a showing assistant or admin can go on PREC payroll, while a licensed buyer agent cannot be paid through it.
Should I pay myself salary or dividends from the PREC?
That is a tax-planning decision for your CPA. Our job is to record each transfer the way the CPA has set it up, at the time it happens, so there is no lump to sort out at year-end.
Does the PREC handle trust deposits from my deals?
No. Deposits held in trust sit in the brokerage's trust account under BCFSA's trust account rules. The PREC's ledger records commission only once the brokerage releases it.
How long should I keep PREC records?
CRA's general rule is to hold them six years, counting from the close of the last tax year they cover. Commission statements, bank statements, receipts, payroll files and share resolutions all count.