Can a health professional practise through a corporation in Ontario?

Every profession named in Schedule 1 of the Regulated Health Professions Act, 1991 can practise through a professional corporation. That includes physicians, nurses, naturopaths, physiotherapists, chiropractors, dentists, massage therapists, psychotherapists and the rest. The structure is narrower than an ordinary business corporation, because it exists to carry on one profession.

What is a health profession corporation?

It’s a corporation incorporated under Ontario’s Business Corporations Act that holds a valid certificate of authorization issued under the Regulated Health Professions Act, 1991 or its Code. The certificate comes from the profession’s college, which sets its own application process, fees and naming rules. Section 34.1 of the RHPA prohibits a corporation from holding itself out as a health profession corporation without a valid certificate.

Who can own the shares?

Profession	Voting shares	Non-voting shares	Directors and officers
Physicians	Members of CPSO only	Members, or a member shareholder’s spouse, child or parent, or a trust for their minor children	Shareholders who are CPSO members
Dentists	Members of the Royal College of Dental Surgeons only	Members, or a member shareholder’s spouse, child or parent, or a trust for their minor children	Shareholders who are members
All other health professions	Members of the same profession only	Members of the same profession only	Shareholders

The general rule is in section 3.2 (2) of the Business Corporations Act: all shares must be legally and beneficially owned, directly or indirectly, by members of the same profession, and all officers and directors must be shareholders. O. Reg. 665/05 sets out the physician and dentist exceptions for family members.

What else does the Act require?

• Name. The name must include “Professional Corporation” or “société professionnelle”, and can’t be a number name. The college’s own naming rules also apply.
• Business. The articles must say the corporation may not carry on a business other than the practice of the profession. Related or ancillary activities, including investing surplus funds, are allowed.
• Votes. An agreement or proxy that gives someone other than a shareholder the right to vote the shares is void. For physician and dentist corporations, the vote must stay with shareholders who are members.
• Unanimous shareholder agreements. These are void unless every shareholder is a member, subject to the physician and dentist family rules.

Does incorporating protect me from professional liability?

No. Section 3.4 of the Business Corporations Act says a member’s liability for a professional liability claim isn’t affected by practising through a professional corporation, and a shareholder is jointly and severally liable with the corporation for professional liability claims arising while they were a shareholder. A professional corporation can still be useful for contracts, tax planning and running the practice, but it isn’t a liability shield for clinical work.

Can a business partner who isn’t a member invest?

Not in the professional corporation itself. Clinicians who work with a business owner, for example in a med spa or wellness clinic, usually keep their professional corporation separate and contract with the business that owns the lease, equipment and brand. See who can own a med spa in Ontario.

What about tax?

A professional corporation can be a Canadian-controlled private corporation and may qualify for the small business deduction under section 125 of the Income Tax Act. Whether incorporating saves tax depends on how much you earn, how much you leave in the corporation, and how your profession’s services are taxed, so ask an accountant. See what is a CCPC and should I incorporate.

What to do next

Check your college’s current requirements for a certificate of authorization before you file articles. Our incorporation fee starts at $600. A professional corporation’s articles and college application add steps, so we confirm the fee in writing before we start.

This guide is general information about Ontario law, not legal or tax advice for your situation. To talk through incorporating your practice, book a free 15-minute consult.