A buyer of an Ontario medical practice acquires equipment, the lease, the trade name and the goodwill. They do not acquire the seller’s certificate of registration, they do not acquire the OHIP billing number, and unless they are themselves a physician they cannot acquire a single share of the practice corporation — not even a non-voting one.
Key takeaways
SECTION 01 OF 09
The licence is the first. RHPA s.27(1): “No person shall perform a controlled act set out in subsection (2) in the course of providing health care services to an individual” unless authorised or delegated. Medicine Act s.3: “The practice of medicine is the assessment of the physical or mental condition of an individual and the diagnosis, treatment and prevention of any disease, disorder or dysfunction.”
The name is the second. Section 9(3): “No person other than a member shall hold himself or herself out as a person who is qualified to practise in Ontario as an osteopath, physician, surgeon”. Section 11 makes that an offence: up to $25,000 for a first offence.
The patients are the third: a closure notice must set out “options for patients if no successor is available or they do not choose to continue with the planned successor” (CPSO). A patient list is an introduction with an opt-out.
SECTION 02 OF 09
The general rule is in the share restriction that forces an asset deal. Physician corporations are carved out and given a tighter one. O. Reg. 665/05 s.2(1) paragraph 1: “Each issued and outstanding voting share of the corporation shall be legally and beneficially owned, directly or indirectly, by a member of the College of Physicians and Surgeons of Ontario.”
Paragraph 2 shuts the next door. A non-voting share may be held by a College member; by “a family member of a voting physician shareholder”; or by trustees “in trust for one or more children of a voting physician shareholder who are minors”. A family member is “the shareholder’s spouse, child or parent” (spousal shares, family trusts). No class of share exists for a fund or a consolidator to hold, and s.2(2) closes the board: “All officers and directors of the corporation shall be shareholders of the corporation who are members of the College of Physicians and Surgeons of Ontario.”
SECTION 03 OF 09
The regulation permits ownership “directly or indirectly”, which on its face allows a physician-owned holding company. The CPSO disagrees: “Holding companies may not own shares in medicine professional corporations.” Its only exception is a trust for a voting physician shareholder’s minor children (CPSO).
The regulation is the law; the College page is the position of the body that issues the certificate, and the position is what a filing must satisfy. The veterinary college allows a licensee-owned holding company, which is why a veterinary practice can be bought through one and a medical practice cannot (the mirror question).
SECTION 04 OF 09
Code s.85.8(1) lets “one or more members of the same health profession” establish a corporation “for the purposes of practising their health profession”. Incorporating is half of it: s.34.1(1) makes the gap an offence — “No corporation shall hold itself out as a health profession corporation unless it holds a valid certificate of authorization” (Treadstone Law).
The CPSO charges $400 to apply and $175 to renew annually, and on a failure to comply “CPSO will issue a notice to revoke the corporation's Certificate of Authorization in 60 days if unresolved”. Section 85.9 requires notice to the Registrar of “a change in the shareholders of the corporation who are members of the College”, within “15 days of the shareholder change” (CPSO); its FAQ confirms family shareholders do not trigger it. Make sign-off a closing condition.
SECTION 05 OF 09
Suppose the buyer is a physician, so the shares are available. They still acquire no clinical authority over the doctors who stay. Under Section 85.11(1) a member’s professional, fiduciary and ethical obligations “are not diminished by the fact that the member is practising through a health profession corporation” and “apply equally to the corporation and to its directors, officers, shareholders, agents and employees”.
Section 85.12 decides the tie between a duty to a patient and a duty to the corporation: “the duty to the patient, the college or the public prevails”. Under s.85.11(4) the corporation “is jointly and severally liable with the member for all fines, costs and expenses that the member is ordered to pay”. And s.85.14(3) makes an ineligible shareholder fatal: the corporation “shall not practise a health profession when it does not satisfy the requirements for a professional corporation” under s.3.2(2) of the Business Corporations Act.
SECTION 06 OF 09
This is what lets a non-physician participate at all, and why that participation stays fragile. Health Insurance Act s.16.1(1) lets a physician direct payments they are lawfully entitled to towards a prescribed person or entity, and Reg. 552 s.38.0.0.1(4) prescribes who — including “a person or partnership with which the physician group has an agreement concerning the provision of insured services at those sites”. That clause is what a services agreement stands on.
It is a direction, not an assignment. Section 16.1(3): “The entitlement to payment for services performed by a physician or a practitioner is that of the physician or practitioner and not that of the person or entity to which the physician or practitioner has directed that such a payment be made.” The billing number itself is granted to the physician under s.16.2, not traded, which is why the transition covenant and the vendor non-compete matter more here than in an ordinary sale.
SECTION 07 OF 09
Most family practices are outside this; clinics that sedate or operate are not. Part XI of O. Reg. 114/94 catches work under general anaesthesia, sedation or regional anaesthesia, plus listed cosmetic and chronic-pain work. Section 49(1): “No member shall commence using premises for the purposes of performing procedures unless the member has previously given notice in writing to the College”. The duty is the member’s own, and the notice must name “the individual or corporation who is the owner or occupier of the premises”.
A person the deal turns on sits on top of that: “The Medical Director is the CPSO approved physician responsible for oversight of the OHP” (CPSO) — and “The medical director must await approval from CPSO prior to implementing any changes” (CPSO).
A clinic paid facility costs needs a licence, the least transferable asset in the deal. Integrated Community Health Services Centres Act, 2023 s.11(1): “A licence is not transferable without the prior approval of the Director”, who then treats the transferee as a fresh applicant. Section 26(1) bars any contract producing “a change in the beneficial ownership of the licence without a corresponding transfer of the licence”, and s.1(2) fixes control at 10 per cent of the votes, so a minority stake trips it.
SECTION 08 OF 09
The shares are closed to a non-physician; registration, billing number and premises approval are personal. What transfers is equipment, leasehold improvements, the lease, a trade name implying no physician, goodwill and the staff — an asset purchase. See leaving the corporation behind, the staff on a sale, the landlord, asset versus share purchase.
The alternative is a services agreement: the buyer owns the premises, equipment and administration and contracts with a physician-owned corporation that owns the medicine. Two rules constrain its pricing. O. Reg. 114/94 s.16 makes it a conflict for a member to rent premises to or from a supplier they refer patients to unless “the amount of the rent is not related to the volume of business carried out in the premises by the tenant”. And s.7(1): “A member shall not participate directly or indirectly in a system in which another person steers or recommends people to a member for professional services.” The College calls the same ground clinical independence (CPSO). A fee tied to clinical volume is the shape both rules point at.
SECTION 09 OF 09
A sale is a practice closure for the seller. Physicians “must provide patients with at least 90 days’ notice of a planned closure”, though “In instances where a successor will be in place to take over the practice the notice period may be shortened” (CPSO). The sequencing runs backwards from a normal deal: the buyer must be found and ready before the seller announces. Records are governed separately — see patient records on a practice sale.
Confirm four things before signing: the certificate of authorization is current and its renewal date known; every post-closing shareholder, officer and director is a CPSO member or inside the O. Reg. 665/05 family limb; any premises approval or licence has an incoming holder; and the corporation outlives the seller — Treadstone Law on a certificate after retirement and on transferring a corporation both note it needs an active licensed shareholder. The answer differs again for an accounting practice.
No. Voting shares in the professional corporation must be owned by a member of the College of Physicians and Surgeons of Ontario, and non-voting shares can only go to a College member, a family member of a voting physician shareholder, or a trustee for that shareholder’s minor children. No share class is open to a fund, consolidator, or holding company.
No. Although the regulation permits ownership “directly or indirectly,” the College takes a stricter position: “Holding companies may not own shares in medicine professional corporations,” with the only exception being a trust for a voting physician shareholder’s minor children. That College position is what a filing must satisfy.
It stays with the physician regardless of the sale agreement. The entitlement to payment for services performed by a physician is that of the physician, not of any entity the payment is directed to, and the billing number itself is granted to the physician and cannot be traded — which is why these deals are usually structured as an asset purchase or a services agreement.
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