Step 1: Create an Ontario Corporation
Before you can have a dentistry professional corporation, you will need to incorporate your business. Incorporating entails:
- Filing articles of incorporation with the Ontario government
- Doing a NUANS name search to ensure that your proposed corporate name will not get into trouble with trademarks that already exist in your industry which may cause confusion because of similarities, etc.
- Paying the fees to incorporate and the NUANS name search
- Getting a minute book
- Having a lawyer update the corporate minute book by preparing the by-laws, director resolutions, shareholder resolutions, director and shareholder registries, issuing shares, etc.
By the time you’re done all the paperwork, minute book update, consulting with a lawyer, etc., you should have a corporation. Now, keep in mind that, in order for that corporation to carry on business as a “Dentistry Professional Corporation”, a few things need to be followed. I’ll get into this next…
Step 2: The Name of the Dentistry Professional Corporation
You can’t pick any name you want for your corporation. You must:
- NOT have a number for a name (e.g. 123456 Ontario Inc.);
- Include the surname of a shareholder who is a member of the Royal College of Dental Surgeons of Ontario;
- Include the words “Dentistry” and “Professional Corporation“; and
- The name CANNOT include anything else.
Wondering where these requirements all came from? Check out the Ontario Business Corporations Act, section 3.2(2) and section 1 of the Certificates of Authorization Regulation (O. Reg. 39/02) made under the Regulated Health Professions Act.
Step 3: The Business of the Dentistry Professional Corporation
The articles of the corporation must indicate that the corporation cannot carry on a business other than the practice of the profession governed by the Royal College of Dental Surgeons of Ontario and activities related to or ancillary to the practice of that profession. Again, check out the Ontario Business Corporations Act, section 3.2(2)5 and section 1 of the Certificates of Authorization Regulation (O. Reg. 39/02) made under the Regulated Health Professions Act.
Step 4: The Share Structure of the Dentistry Professional Corporation
You can’t have just any old share structure with a professional dental corporation. You are only allowed to have issued and outstanding voting shares of the corporation owned by a member of the Royal College of Dental Surgeons of Ontario. You are also allowed (and this may make sense for tax planning purposes, especially if you’re looking to use your lifetime capital gains exemption on the sale of shares of a small business corporation) to have the following individuals own, directly or indirectly, the NON-VOTING shares of the corporation:
- a member of the Royal College of Dental Surgeons of Ontario;
- a family member of a voting dentist shareholder; or
- one or more individuals, as trustees, in trust for one or more children of a voting dentist shareholder who are minors, as beneficiaries.
Step 5: Getting a Certificate of Authorization
Now, assuming you’ve complied with all of the above, once the corporation is up and running, it will need to have a Certificate of Authorization from the Royal College of Dental Surgeons of Ontario. To do that, you’ll need to submit numerous documents (your lawyer will prepare and submit these on your behalf):
- A completed application form;
- Application fee;
- The articles of incorporation;
- A Certificate of Status from the Ministry of Consumer and Business Services not more than 30 days before the application is submitted to the Registrar, which indicates that the corporation is active;
- a certified copy of the certificate of incorporation of the corporation (a lawyer can notarize this for you);
- a certified copy of every certificate of the corporation that has been endorsed under the Business Corporations Act as of the day the application is submitted (again, use a lawyer for this);
- a statutory declaration of a director of the corporation, executed not more than 15 days before the application is submitted to the Registrar, certifying the following:
i. that the corporation is in compliance with Section 3.2 of the Business Corporations Act (see above), including the regulations made under that section, as of the date the statutory declaration is executed,
ii. that the corporation does not carry on, and does not plan to carry on, any business that is not the practice of the profession governed by the Royal College of Dental Surgeons of Ontario or activities related to or ancillary to the practice of that profession,
iii. that there has been no change in the status of the corporation since the date of the Certificate of Status (see above), and
iv. that the information contained in the application is complete and accurate as of the day the statutory declaration is executed.
- the name of each person who is a shareholder of the corporation as of the day the application is submitted and, if the shareholder is a member of the College, his or her business address, business telephone number and registration number with the College as of that day;
- the names of the directors and the officers of the corporation as of the day the application is submitted, and
- the address of the premises at which the corporation carries on activities as of the day the application is submitted.
PHEW! That’s a lot. So you can see why it costs a few thousand dollars to hire a lawyer to do all of this. There are a lot of compliance requirements to have a dentistry professional corporation.
In order to avoid wasting time and money NOT GETTING IT RIGHT, you should contact a lawyer (such as myself) to help you through the process.