How to Set Up a Professional Corporation in Ontario

A professional corporation is an ordinary Ontario business corporation that holds a certificate of authorization from the body that regulates its owners' profession. Section 3.1 of the Business Corporations Act defines it that way, and subsection 3.1 (2) sets out which professions qualify. A profession may be practised through a corporation if the statute governing it expressly permits that, or if the profession is governed by one of the health profession Acts named in Schedule 1 of the Regulated Health Professions Act, 1991, the Chartered Professional Accountants of Ontario Act, 2017, the Law Society Act, the Social Work and Social Service Work Act, 1998, the Veterinarians Act or a prescribed Act.

In practice that covers physicians, dentists, pharmacists, nurses, physiotherapists, chiropractors, optometrists and the other regulated health professions, together with chartered professional accountants, lawyers and paralegals, social workers and veterinarians. Other regulated occupations, including engineers and architects, operate under their own statutes and licensing regimes for business entities, and the OBCA provisions described here do not apply to them in the same way.

The regulator, usually called the College for health professions, decides whether to issue the certificate. The ministry that incorporates the corporation does not. That split explains the sequence described below: the corporation is created first and becomes a professional corporation only when the regulator says so. The encyclopedia entry on professional corporations summarizes the concept; this guide walks through the setup.

Subsection 3.2 (2) of the Business Corporations Act imposes five conditions, and a corporation that fails any of them is not eligible for a certificate.

1. 1.All of the issued and outstanding shares must be legally and beneficially owned, directly or indirectly, by one or more members of the same profession.
2. 2.All officers and directors must be shareholders.
3. 3.The name must include the words Professional Corporation or société professionnelle and must comply with the naming rules in the regulations and in the profession's own regulations or by-laws.
4. 4.The corporation may not have a number name.
5. 5.The articles must provide that the corporation may not carry on a business other than the practice of the profession, although it may carry on related or ancillary activities, including investing its surplus funds.

Two further rules protect the professional character of the ownership. Subsection 3.2 (4) makes void any agreement or proxy that gives a non-shareholder the right to vote a share. Subsection 3.2 (5) makes a unanimous shareholder agreement void unless every shareholder is a member of the profession, subject to the health profession exceptions below. Section 3.3 adds that the certificate remains valid despite the death or divorce of a shareholder, the bankruptcy of the corporation or a suspension of the certificate, but becomes invalid on revocation, and a corporation that ceases to be a professional corporation must drop the word professional from its name.

The ownership condition is the one that most often disappoints owners. A lawyer cannot hold shares of a law professional corporation through a family trust or a holding company owned by a spouse. An accountant's practice corporation cannot have a non-accountant investor. The shares must trace back to members of that profession, with one statutory variation: the Law Society Act lets lawyers and licensed paralegals own a professional corporation together.

Ontario relaxed the ownership rule for two professions. Under O. Reg. 665/05, a physician corporation and a dentist corporation are exempt from the first two conditions and follow substitute rules instead.

Every voting share must be legally and beneficially owned, directly or indirectly, by a member of the College of Physicians and Surgeons of Ontario or the Royal College of Dental Surgeons of Ontario, as the case may be. Non-voting shares may be owned by a member of the College, by a family member of a voting shareholder, defined as the shareholder's spouse, child or parent, or by one or more individuals as trustees for the minor children of a voting shareholder. All officers and directors must be shareholders who are members of the College. Both Colleges state that a holding company may not own shares of a medicine or dentistry professional corporation.

The regulation also adjusts the voting and shareholder agreement rules so that non-voting family members can hold shares without invalidating the structure, and it exempts non-voting shareholders who are not College members from the professional liability provisions that otherwise treat a corporation's acts as the acts of its shareholders. The commercial point of the exception is to allow income to be shared with family members through dividends on non-voting shares. The tax on split income rules limit that benefit substantially for family members who are not active in the practice, so the share classes should be designed with an accountant and the share structure should be settled before the articles are filed.

Beyond the mandatory words Professional Corporation, each regulator imposes naming standards. For the health professions, O. Reg. 39/02 under the Regulated Health Professions Act, 1991 requires the name to include the surname of one or more shareholders who are members of the College, as the surname appears in the College register, optionally with given names or initials. The name must indicate the health profession practised through the corporation and must contain no other information. A name such as Patel Dentistry Professional Corporation follows the pattern; a name built around a clinic brand does not.

Because the ministry will incorporate a corporation whose name later fails the regulator's test, the Colleges urge applicants to check their name against the certificate requirements before filing articles. The College of Physicians and Surgeons of Ontario publishes its name requirements and asks physicians to confirm compliance before incorporating. The Royal College of Dental Surgeons of Ontario offers an optional name pre-approval form. Using those tools avoids a certificate refusal and a set of articles of amendment at $150 as of October 2026.

Each professional corporation also carries the usual OBCA naming obligations, including setting out its full legal name on contracts, invoices and other formal documents. A professional corporation cannot be a numbered company, so there is no shortcut around the naming step.

1. Model the structure with an accountant. The decision to incorporate a practice is driven mainly by tax deferral and, for physicians and dentists, by family ownership. Confirm the benefit is real for your income and spending before paying for a corporation.

2. Incorporate under the Ontario Business Corporations Act. Both the College of Physicians and Surgeons of Ontario and the Royal College of Dental Surgeons of Ontario state that a federal corporation cannot obtain a certificate of authorization, so the corporation must be incorporated or continued under the Ontario Act. Ontario's online incorporation fee is $300 as of October 2026. The articles must contain the business restriction required by subsection 3.2 (2), a compliant name and share classes that fit the ownership rules. Our guide to registering a corporation in Ontario describes the filing itself.

3. Organize the corporation. Adopt by-laws, appoint directors and officers who are all shareholders and members of the profession, issue shares to eligible holders and assemble the minute book. Regulators ask for the directors' declaration that the corporation complies with section 3.2, which cannot honestly be signed until this step is done.

4. Apply for the certificate of authorization. For the health professions, O. Reg. 39/02 lists what the College must receive: an application in the College's form, the application fee set by the College's by-laws, a corporation profile report dated within 30 days showing the corporation is active, copies of the certificate of incorporation and every endorsed certificate, a director's declaration signed within 15 days confirming compliance with section 3.2 and that the corporation carries on no other business, the names and College registration numbers of the shareholders who are members, the names of the directors and officers, and the address of the premises. The College of Physicians and Surgeons of Ontario charges $400 for the application, processed through its member portal. The Royal College of Dental Surgeons of Ontario charges $750, also through its portal, and notes that the corporation cannot charge dental fees until the certificate is issued; until then the dentist bills as an individual. Lawyers and paralegals apply to the Law Society of Ontario, and accountants deal with CPA Ontario, whose by-laws govern accounting professional corporations; each sets its own fees and documentation.

5. Complete the ordinary post-incorporation steps. Business number and payroll accounts, a bank account in the corporate name, insurance in the corporation's name where the insurer requires it, assignment of the lease and billing arrangements, and the Ontario initial return. Our after-incorporation checklist covers the first 60 days.

A professional corporation shields its shareholders from the ordinary debts of the practice: the lease, the equipment loan, the supplier accounts, subject to any personal guarantee. It does not shield them from professional liability. Section 3.4 of the Business Corporations Act is explicit. The general rule that shareholders are not liable for corporate obligations is not to be construed as limiting the professional liability of a shareholder for his or her own acts or the acts of the corporation's employees and agents. For professional liability purposes, the corporation's acts are deemed to be the acts of its shareholders, employees or agents. A member's liability for a professional claim is unaffected by practising through the corporation, and each shareholder is jointly and severally liable with the corporation for professional claims arising from errors and omissions that occurred while that person was a shareholder, although never for more than the liability they would have carried without the corporation.

Professional liability insurance therefore remains the primary protection, and the regulator's insurance requirements continue to apply to the individual members. Where a professional corporation is a partner in a partnership or limited liability partnership, subsection 3.4 (6) gives its shareholders the same liability for the partnership as if they were the partners themselves.

The certificate of authorization is renewed every year. For health professions, O. Reg. 39/02 requires a renewal application with the College's renewal fee, a fresh corporation profile report dated within 30 days, copies of any certificates endorsed since the last application, a director's declaration of continued compliance signed within 15 days, and current shareholder, director, officer and premises information. The College of Physicians and Surgeons of Ontario charges $175 for renewal and sends a portal reminder about six weeks before the deadline, but the corporation must start the renewal. The Royal College of Dental Surgeons of Ontario's certificates all expire on August 31 regardless of when they were issued, and a certificate not renewed by then is revoked effective September 1 and cannot be revived except by a new application.

Between renewals, the corporation must notify the College of a change of name or articles and provide the endorsed certificate, failing which it ceases to be eligible to hold the certificate. A change in the shareholders who are College members must also be reported to the College, and physician and dentist corporations must include a director's declaration of continued compliance. The regulation lists the grounds for revocation, including ceasing to be eligible, ceasing to practise, carrying on another business and failing to meet renewal requirements, and requires the College to give 60 days' notice before a revocation takes effect.

All of the ordinary corporate obligations continue as well: the Ontario annual return, the register of individuals with significant control, annual resolutions and up-to-date minute book entries. The corporate compliance checklist lists them.

A certificate of authorization belongs to a particular corporation and does not travel with the practice. A buyer who purchases the shares of a dentistry professional corporation must still be a dentist, and the corporation must report the change in shareholders and confirm continued compliance. A buyer who purchases the practice assets through a new corporation applies for a new certificate. The Royal College of Dental Surgeons of Ontario notes that an amalgamated professional corporation needs a new certificate because the predecessor ceases to exist. Our guide to buying a dental practice in Ontario works through those transactions, and the same logic applies to medical, veterinary and accounting practices.

1. 1.Confirm your profession is covered by subsection 3.1 (2) and read your regulator's rules on corporations before anything else.
2. 2.Model the tax and family ownership benefit with an accountant, including the tax on split income rules.
3. 3.Choose a compliant name and use the regulator's pre-approval process where one exists.
4. 4.Incorporate under the Ontario Business Corporations Act with the mandatory business restriction and suitable share classes.
5. 5.Organize the corporation and issue shares only to eligible holders.
6. 6.Apply for the certificate of authorization with the profile report, declarations and fee your regulator requires, and do not bill through the corporation until it issues.
7. 7.Calendar the annual renewal, the reporting of shareholder and name changes and the ordinary corporate filings.
8. 8.Keep professional liability insurance in place; the corporation does not limit it.

This article is general information about Ontario professional corporations. Each regulator's by-laws, fees and forms change, so confirm current requirements with the College or governing body before applying. Lamba Law's incorporation and structuring practice incorporates and organizes professional corporations, prepares the regulator application package and coordinates the share structure with the client's accountant.