Professional Corporation

If the College revokes a certificate of authorization, the professional corporation must apply for a new one and meet the eligibility requirements in effect at the time, which includes submitting the required information and paying the fees.

The decision whether or not to set up your practice as a professional corporation will depend on a number of factors including the nature of your practice, with whom you practice, your personal financial circumstances and the financial circumstances of your practice.  All these factors must be considered in light of the advantages and disadvantages of the professional corporation model.

In most cases, it is advisable to obtain advice on these matters from professionals skilled in assessing financial circumstances and the legal aspects of corporations.  The College recommends that you discuss your plans for professional incorporation with your accountant and lawyer before proceeding.

If the corporation is going to practise naturopathy, it must be converted into a naturopathic professional corporation operating under a certificate of authorization.

As noted above, the advantages and disadvantages of setting up your practice as a professional corporation will depend to a large degree on your personal circumstances as well as the circumstances of your practice.

Generally speaking, the College understands that much of the benefit of the professional corporation relates to the way corporations are taxed.  However, it should be noted that the restricted ownership structure of the professional corporation might negate some of these benefits.  As such the College recommends that you discuss your plans for professional incorporation with your accountant and lawyer before proceeding.

From the College’s perspective, the main difference is that a practice management corporation cannot practise naturopathy.  As such a certificate of authorization is not required for a practice management corporation.  Your legal and business advisors can provide specific advice relevant to your circumstances.

As noted previously, there are differences between professional corporations and those that manage practices.  A corporation that manages a practice is not permitted to practise a regulated health profession and hence is not required to register with this College or the Colleges of their shareholders.

The College cannot provide information on how long it takes to obtain Articles of Incorporation from the Ministry of Government and Consumer Services.  Registrants are advised to contact the Ministry directly at www.ontario.ca/ministry-government-and-consumer-services for information on how to set up a professional corporation and the timing of this process.

Once a registrant submits an application to the College for a Certificate of Authorization for a professional corporation, the College will endeavour to process the application within 30 days.  Naturally, the College can only meet this goal if the application is submitted with all the required supporting documents and fees.

There are a number of restrictions on the names of professional corporations.  Briefly, the names of professional corporations must:

• Include the words “Professional Corporation” or “société professionnelle”.
• Include the surname of one or more shareholders of the corporation as the surname is set out in the College register.
• Indicate the health profession practiced by the shareholders as authorized in the Naturopathy Act, 2007 (i.e., “naturopathy” or “naturopathic”); [TIP: “naturopathy” is the term authorized in the Act and “naturopathic” would be an acceptable derivation however, “naturopathic medicine” would not reflect the terminology in the Naturopathy Act and would therefore not be acceptable.].

and must not:

• Include any information other than that permitted under the Business Corporation Act or the regulations.
• Include any professional titles or designations (e.g., “Dr.”, “Doctor”, “Naturopathic Doctor” or “ND”).
• Violate the provision of any other Act.
• Have a number name.

Despite these restrictions, the corporation name may also include the shareholders’ given name, one or more of the shareholder’s initials or a combination of his or her given name and initials.

For detailed information, please refer to section 3.2 of the Business Corporation Act and Ontario Regulation 39/02 under the Regulated Health Professions Act, both of which are included in the College information package on professional corporations.  It is also wise to consult with the College before setting up your corporation to ensure that the name is appropriate and thus avoid the need to change this name after applying to the College.

Not necessarily. The rules for the names of professional corporations mean that your current practice name will probably not qualify as an appropriate name for your professional corporation.  Since it may be confusing for your patients if you change your practice name to match the name of your professional corporation, the rules permit professional corporations to practice under different names.  However, any material that includes your practice name (e.g., letterhead, invoices, receipts) should also have the corporation name on it if the two are different.  Owners of professional corporations are required to inform the College of every practice name under which the professional corporation practices. Naturally, there is nothing to prevent you from using the name of your professional corporation as the name of your practice.

As noted above, the Business Corporations Act provides that the only business that professional corporations are permitted to undertake is the practice of the profession and activities that are related to or ancillary to the practice of the profession.  This includes the temporary investment of surplus funds earned by the corporation. The practice of another profession (e.g., massage therapy, physiotherapy, chiropractic) is not “related to or ancillary” to the practice of naturopathy and cannot be practised by or through a professional corporation. Practitioners of these professions need to obtain their own professional corporation with a certificate of authorization from another College.

Section 3.2 of the Business Corporations Act requires that all shares of a professional corporation be owned by one or more members of the same profession.  The same section also requires that all officers or directors of a professional corporation be shareholders of the professional corporation.  Since shareholders must be members of the same profession, and officers and directors must be shareholders, only members of the same profession can be officers or directors.[1]

[1] See Frequently Asked Questions section for information on holding companies.

No – shareholders in a professional corporation must be members of the same profession.  In addition all officers and directors must be shareholders so this means that only members of the same profession can be officers or directors.

Yes – holding companies are permitted to hold shares of a naturopathic professional corporation so long as all of the shareholders of the holding company’s shares are registered naturopathic doctors with the College of Naturopaths of Ontario.

Section 3.4 of the Business Corporations Act makes it clear that the shareholders of professional corporations remain responsible for the activities of the professional corporation.  This means that the activities of the corporation reflect directly upon the shareholders’ responsibility to uphold professional standards.  In addition, shareholders of professional corporations retain their liability for professional liability claims made against the corporation in respect of errors and omissions that were made or occurred while the person was a shareholder of the corporations.

To make it clear that the professional corporation cannot be used as a means of avoiding professional responsibilities, section 3.4 also contains a clause that deems the act of a professional corporation to be the acts of the shareholders, employees or agents of the corporation, as the case may be.

Yes – The College can revoke a professional corporation’s certificate of authorization in a number of circumstances.  These include:

• The corporation ceases to be eligible to hold a certificate of authorization.
• The corporation ceases to practise the profession in respect of which the certificate of authorization was issued.
• The corporation fails to comply with one or more of the requirements for a renewal of the certificate of authorization.
• The corporation carries on any business that is not the practice of the profession governed by the College or activities related to or ancillary to the practice of that profession.
• The corporation fails to notify the Registrar of a change in shareholders.

The College has a by-law that governs the kind of information that a professional corporation must provide to the College and when it must be provided.

The by-laws state that every member of the College shall, for every professional corporation of which the Member is a shareholder, provide in writing the following information on the application and annual renewal forms for a certificate of authorization, upon the written request of the Registrar, within 30 days and upon any change in the information within 30 days of the change:

1. The name of the professional corporation as registered with the Ministry of Government Services.
2. Any business names used by the professional corporation.
3. The name, as set out in the register, and registration number of each shareholder of the professional corporation.
4. The name, as set out in the register, of each officer and director of the professional corporation, and the title or office held by each officer and director.
5. The principal practice address, telephone number, facsimile number and email address of the professional corporation.
6. The address and telephone number of all other locations, other than residences of clients, at which the professional services offered by the professional corporation are provided.
7. A brief description of the professional activities carried out by the professional corporation.

 It is important to note that professional corporations are required to provide the College with updates to this information within 30 days of any change.

While this model may seem to be unnecessarily complex, the Business Corporations Act requires professional corporations to obtain their Articles of Incorporation from the Ministry of Government and Consumer Services and their certificate of authorization from the organization that regulates their profession.

The College understands that this process is intended to ensure that the shareholders, officers and directors of professional corporations understand their professional responsibility respecting the activities of their corporations.  In addition, the responsibilities that have been delegated to regulatory agencies are justified on the basis that regulatory agencies must retain authority over their members and the ability to grant, and to revoke certificates of authorization is a means of maintaining this kind of authority.

The College and other regulatory bodies did not choose to regulate professional corporations.  Rather, the government chose to delegate this role to regulatory bodies as an additional duty, above and beyond their duties to regulate individual members.

In most respects, corporations, including professional corporations, are entities that are treated in the law much like individuals.  This means that although they may be owned by members of the College, the professional corporation is distinct from its owners and must be treated as such.

Furthermore, the requirement for the College to record and monitor substantial amounts of information about professional corporations that is different from the kind of information kept on individual members requires the College to establish separate processes for record keeping, administration, and management of professional corporations.  As such, a separate fee for professional corporations was established.