Only a member of the Royal College of Dental Surgeons of Ontario may hold a voting share in an Ontario dentistry professional corporation. O. Reg. 39/02 makes that a condition of eligibility for the certificate of authorization, and the College adds that holding companies may not own shares at all (RCDSO). An outside buyer is left with the assets and a service relationship, not the practice.
Key takeaways
SECTION 01 OF 09
Read the Dentistry Act, 1991 end to end and you will not find a word about who may own a practice. It runs about 1,400 words, and the ownership machinery is borrowed. Section 2(1) says how: “The Health Professions Procedural Code shall be deemed to be part of this Act.”
The Code, Schedule 2 to the Regulated Health Professions Act, 1991, authorises corporate practice at s.85.8(1): “one or more members of the same health profession may establish a health profession corporation for the purposes of practising their health profession”. Dentistry reaches the corporate rules through Business Corporations Act s.3.1(2)(b), which covers any profession named in Schedule 1 of the RHPA. Four instruments decide whether the deal is possible, and the one with Dentistry in its title is the least useful.
SECTION 02 OF 09
O. Reg. 39/02 s.1(1) paragraph 2.2, headed Eligibility, is the operative text: for a certificate issued by the Royal College of Dental Surgeons of Ontario, “each issued and outstanding voting share of the corporation is legally and beneficially owned, directly or indirectly, by a member of the College”. Non-voting shares may go to a College member, to a family member of a voting dentist shareholder, or to a trustee for that shareholder’s minor children.
The rule is enacted twice, under two Acts. O. Reg. 665/05 s.3, made under the Business Corporations Act, exempts a dentist corporation from the general share rule and substitutes the same split. Family shares are an economic interest, not control (Treadstone Law). The consequence for the seller is worked through in the share-restriction article.
SECTION 03 OF 09
Asked whether a holding company can own shares of a health profession corporation, the College answers: “Holding companies may not own shares in a dentistry professional corporation” (RCDSO). That is the regulator’s reading of “directly or indirectly”, and it is the College’s position on Ontario dentistry corporations, not a province-wide rule. Ontario permits a veterinary shareholder exactly the layer it refuses a dentist.
The federal route is closed too — “A certificate of authorization cannot be obtained for federally incorporated corporations” (RCDSO) — which sharpens the general pattern Treadstone Law sets out on federal versus provincial incorporation.
SECTION 04 OF 09
A corporation incorporated but not authorised cannot be used: “It is not permitted to run dental fees for services through a HPC until a certificate of authorization has been issued by the College” (RCDSO). Incorporation is only the first step; the certificate of authorization is a separate permission. Section 2(1) sets the evidence the College must be given, and s.3 removes its discretion to overlook a gap.
Renewal is calendar-fixed, not anniversary-based: “All certificates of authorization expire on August 31 of each year regardless of the initial date of issuance and must be renewed annually” (RCDSO). Certificate renewal is a regulator task, separate from corporate filings, so a late-August closing lands in the year’s narrowest window.
SECTION 05 OF 09
Code s.85.9 requires the corporation to notify the Registrar of a change in the shareholders who are College members. The College fixes the period: “When there is a change in ownership of a dentistry professional corporation, the College must receive notice of the change of shareholders and other required documentation within 10 days of the change of shareholders taking place” (RCDSO practice advisory).
Missing it is a revocation ground, not a filing lapse. Section 6(1) paragraph 5 lists “The corporation fails to notify the Registrar of a change in shareholders in accordance with section 85.9 of the Code.”; s.6(3) then requires revocation 60 days after notice if the ground still exists. A roll-up has a further problem: “Upon amalgamation the predecessor corporations cease to exist and a new certificate of authorization is required” (RCDSO), and only after the amalgamation has happened (Treadstone Law).
SECTION 06 OF 09
A dentistry professional corporation cannot be renamed into a buyer’s brand. O. Reg. 39/02 s.1(3): “The name of the corporation must include the surname of one or more shareholders of the corporation who are members of the College, as the surname is set out in the College register”. Subsection (5) bars anything beyond that and the profession (Treadstone Law on naming rules).
A purchase forces a rename, and the seller’s name has a twelve-month shelf life. The College says that when “a dentistry professional corporation is purchased, a name change is required as set out by regulation and the College should be consulted”, and that “reference to the previous owner on signs or stationery must be removed within one year of the change in ownership” (RCDSO). That limit is regulation, not guidance: O. Reg. 853/93 s.2 paragraph 44 makes it professional misconduct to be “Using in any way with respect to a member’s practice, the name of another member whose practice the member acquired, after a period of one year from the date of the acquisition of the practice.”
SECTION 07 OF 09
The College’s position on service companies is permissive: “TSCs are permissible vehicles for the delivery of certain services, provided they are used in a way that complies with the Regulated Health Professions Act, 1991, the Dentistry Act, 1991 and their respective Regulations” (RCDSO practice advisory). Date it: the document is stamped August 2002, a reprint of a May 2000 advisory, older than the professional-corporation regime it now sits beside.
What is transferable is the non-clinical estate — equipment, leasehold improvements, the lease, practice-management software, non-clinical staff contracts, and a service agreement supplying all of it to a dentist-owned corporation. What is not transferable is the corporation that treats the patients, its certificate, the voting shares, or the patients themselves; the records run on their own statutory track, set out in what happens to patient records when a practice is sold.
SECTION 08 OF 09
The service-company structure survives or dies on O. Reg. 853/93 s.5(4). Clause (i) makes it a conflict of interest where a member “engages in the practice of dentistry by employment, association, partnership or otherwise with any person or corporation other than” a member engaged in the practice of dentistry, or a listed public body. The College restates it as a duty: “dentists must only be employed by other members of the College or certain institutions, such as hospitals, universities, governments or community health centres” (RCDSO conflict of interest guidelines). An investor-owned employer of dentists is in none of those categories.
Clause (h) closes the revenue share — a conflict where the member “engages in any form of fee or income sharing with any person other than” an associated member, a partner member, or a dental hygienist in the practice. Clause (a) closes percentage rent, catching a lease or use of premises or equipment under which an amount payable is “related to the amount of fees charged by the member”. The College puts it in a line: “Dentists who rent space or equipment must not pay that rent based on their billings.”
So price a management fee on services actually supplied, not on billings or net revenue, and make in-group rent fixed rather than participating — a conflict of interest is itself misconduct under paragraph 38 of s.2.
SECTION 09 OF 09
Much of this is checkable before signing. Code s.23(2) requires the register to carry “The names of the shareholders of each health profession corporation who are members of the College.” and a notation of every revocation or suspension of a certificate. A shareholder list that does not match the share register you were shown is better found now. Incorporation moves no risk away either: Code s.85.11(4) makes “the health profession corporation is jointly and severally liable with the member for all fines, costs and expenses that the member is ordered to pay”.
Two timing items belong in the conditions. If the selling dentist retires, “the revocation of the certificate(s) will be automatic upon the effective date of your resignation” (RCDSO) — the dentistry instance of what Treadstone Law describes when the licensed professional retires. And the patients are told by the seller: “The selling dentist must notify the patients of the practice in writing about the change in ownership.”
All of this is Ontario, and it is not uniform even inside it: O. Reg. 39/02 s.1(1) gives physicians and dentists a voting/non-voting split and every other Ontario health college the stricter all-shares rule in paragraph 2.
No. The College’s own position on Ontario dentistry professional corporations is that holding companies may not own shares in them at all — the opposite of the one layer Ontario permits for a veterinary practice. An outside buyer is left with the non-clinical assets and a service relationship, not the practice itself.
Up to one year, and no longer. Regulation makes it professional misconduct to keep using a previous owner’s name on signs or stationery beyond twelve months after the change of ownership, and the College says a name change is required as set out by regulation once a practice is purchased.
Yes, and quickly. The corporation must give the Registrar notice of any change in shareholders who are College members within 10 days of the change taking place, and missing that deadline is itself a ground for the College to revoke the certificate of authorization — not merely a filing lapse.
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