Professional Corporations in Ontario

Certain regulated professionals may practise through an Ontario professional corporation. A professional corporation is incorporated under Ontario’s Business Corporations Act and must also comply with the legislation, regulations, by-laws, and requirements governing the applicable profession.

Although professional corporations share many common incorporation and organizational requirements, the rules relating to corporate names, shareholders, directors, officers, and authorization to practise can vary by profession. 

Nobari Law Professional Corporation assists eligible regulated professionals with incorporating and organizing professional corporations in Ontario. The services required will be confirmed after reviewing the requirements of the applicable governing body.

A professional corporation is an Ontario corporation through which an eligible regulated professional may carry on their professional practice.

Unlike an ordinary business corporation, a professional corporation must comply with both:

• Ontario corporate legislation; and 
• the requirements established by the professional’s governing body. 

Under Ontario’s general professional-corporation framework, the corporation must have an approved professional name, its articles must restrict its business to the practice of the profession and related or ancillary activities, and it must hold the required Certificate of Authorization or other authorizing document before practising the profession. 

Professional incorporation is available only where the legislation governing the profession permits its members to practise through a corporation.

Requirements concerning share ownership, directors and officers, corporate names, permitted activities, and professional authorization vary by profession and should be confirmed before the articles of incorporation are prepared.

Professional incorporation generally involves several stages.

Before incorporation, the applicable governing-body requirements should be reviewed.

This may involve confirming:

• whether the profession permits professional incorporation; 
• the proposed shareholders, directors, and officers; 
• the required corporate-name format; 
• the wording required in the articles; 
• whether a NUANS name search is needed; 
• the authorization documents that must be submitted; and 
• any profession-specific restrictions or conditions. 

A corporate name being available for registration does not necessarily mean that it satisfies the professional regulator’s requirements.

The proposed name must comply with Ontario corporate law and the rules of the applicable profession.

An Ontario professional corporation cannot use a numbered corporate name. Its name must include the words “Professional Corporation” or “société professionnelle” and must satisfy any additional naming requirements established by the applicable governing body.

Depending on the profession, the name may need to:

• include the professional’s surname or personal name; 
• identify the profession being practised; 
• include the words “Professional Corporation”; 
• exclude certain descriptive or promotional wording; and 
• receive approval or confirmation from the governing body. 

For example, Ontario’s regulation governing health-profession corporations establishes particular surname and profession-identification requirements. Other professions may apply different naming rules. 

Once the name and structure have been reviewed, articles of incorporation may be prepared and filed under Ontario’s Business Corporations Act.

The articles of a professional corporation must include the required restriction limiting the corporation’s activities to practising the applicable profession and carrying on activities related or ancillary to that profession. 

After the filing is accepted, Ontario issues the corporation’s Certificate of Incorporation.

Incorporation creates the corporation, but additional documents are normally required to establish its internal structure and records.

The organizational work may include:

• corporate by-laws; 
• initial director and shareholder resolutions; 
• director and officer appointments; 
• share subscriptions; 
• share certificates; 
• registers of directors, officers, and shareholders; 
• a securities register; 
• an individuals-with-significant-control register, where applicable; and 
• an electronic corporate minute book. 

Privately held Ontario business corporations are responsible for maintaining prescribed corporate records, including information about individuals with significant control. 

The corporation’s initial return must also be filed within the applicable filing period. 

Incorporation alone may not authorize the corporation to begin practising the regulated profession.

The corporation may need to apply to the applicable governing body for a:

• Certificate of Authorization; 
• certificate of registration; 
• permit; 
• licence; or 
• other professional authorization. 

Depending on the profession, the application may require the regulator’s application form and fee, the articles and Certificate of Incorporation, a corporation profile report or certificate of status, and information about the shareholders, directors, officers, and professional registration.

Application requirements, submission methods, fees, processing times, and renewal obligations vary by profession.

The ownership and management of a professional corporation must comply with the requirements applying to the particular profession.

Ontario’s general professional-corporation rules restrict share ownership and require the corporation’s officers and directors to satisfy prescribed professional requirements. Certain professions may have additional rules or limited exceptions concerning share ownership or family members. 

The proposed structure should be reviewed before incorporation, particularly where:

• more than one professional will be a shareholder; 
• different classes of shares are being considered; 
• family ownership is proposed; 
• the professional has another corporation; 
• the corporation will acquire an existing practice; or 
• an accountant has recommended a particular share structure. 

Where tax planning is involved, written instructions should be obtained from the client’s accountant or qualified tax professional before the articles and share documents are finalized.

A professional corporation is a separate legal entity for corporate purposes. However, practising through a professional corporation does not remove the professional’s personal responsibility for their own professional services.

Ontario’s Business Corporations Act provides that professional incorporation does not limit a member’s liability for professional-liability claims. 

Professional incorporation should therefore not be treated as a substitute for professional competence, regulatory compliance, or appropriate professional-liability insurance.

Professional incorporation may have tax and financial consequences. Whether incorporation is beneficial will depend on the professional’s individual circumstances, including how income will be earned, retained, and withdrawn from the corporation.

Clients should obtain tax and accounting advice before incorporation. Nobari Law provides legal incorporation and corporate-organization services and does not provide tax, accounting, or financial-planning advice.

Depending on the corporation and profession, ongoing responsibilities may include:

• maintaining the corporate minute book and required registers;
• documenting changes to shareholders, directors, and officers;
• filing required corporate returns and notices;
• renewing the corporation’s professional authorization;
• reporting required changes to the governing body; and
• continuing to comply with applicable ownership, naming, and professional requirements.

A professional seeking to incorporate may be asked to provide:

• valid, current identification and any additional information required for identity verification; 
• their full legal name; 
• their professional designation and registration information; 
• the name of their governing body; 
• the proposed corporate name; 
• the proposed registered-office address; 
• the proposed business address; 
• information about the proposed shareholders, directors, and officers; 
• the intended share structure; 
• instructions from an accountant, where applicable; and 
• information about any existing practice or corporation that may affect the proposed structure. 

Additional information may be required depending on the profession, regulator, proposed ownership, and scope of the retainer.

Do not send original documents, identification, complete account numbers, passwords, or other sensitive information unless requested by Nobari Law Professional Corporation. If requested, please use the document-sending method confirmed by the firm.

Depending on the profession, governing-body requirements, and agreed scope of the retainer, legal services may include:

• identifying incorporation and professional-authorization requirements relevant to the agreed services; 
• reviewing the proposed corporate name for incorporation purposes; 
• arranging a NUANS name search where required and included in the retainer; 
• preparing and filing articles of incorporation based on the information and instructions provided; 
• preparing organizational resolutions, by-laws, and initial corporate records included in the retainer; 
• preparing initial share documents, registers, or electronic minute-book materials, where applicable and agreed; 
• assisting with initial corporate filings included in the retainer; 
• assisting with professional-authorization application materials where separately agreed and permitted by the governing body; and 
• reporting to the client regarding the legal work completed. 

The services provided will depend on the profession, proposed corporate structure, applicable governing-body requirements, and circumstances of the incorporation.

Clients remain responsible for providing complete and accurate information, obtaining any required tax or accounting advice, and completing any regulatory steps or ongoing obligations that are not specifically included in the legal retainer.

Professional incorporation requires compliance with both Ontario corporate law and the rules of the applicable profession.

Contact Nobari Law Professional Corporation to discuss incorporating and organizing a professional corporation in Ontario.