Many designated health professionals within British Columbia (such as Dentists, Physicians, Naturopaths, Pharmacists, Physical Therapists and Optometrists etc) consider the benefits of becoming self employed and practicing through their own professional corporation.
However, practicing through a corporation entails more than simply registering a business with the corporate registry. To ensure that the designated health professional’s proposed company structure will be approved, they should first conduct a thorough analysis of their proposed corporation’s structure in light of the Health Professions Act, the bylaws and rules of their relevant regulating body and any other relevant legislation (collectively the “Regulations”).
Reviewing the Regulations is of vital importance, as in many cases the Regulations are stringent and can dictate what the company name can be, who can be a Director and who can be a voting and non-voting shareholder of the proposed corporation. In some cases, where a holding company or family trust is to be a shareholder, the Regulations may even restrict who can be a shareholder of the holding company or who can be a trustee or beneficiary of the family trust. Therefore, the trickle down effects also require detailed consideration.
By way of example, a Dentist wishing to incorporate a new dental corporation (along with the usual steps required to reserve a company name with the corporate registry), must first have the company name approved by the College of Dental Surgeons of British Columbia (the “College”). To obtain such approval, the College must be satisfied that the Dentist understands and will abide by the applicable Regulations in relation to a dental corporation. Furthermore, a solicitor must also provide written confirmation that certain aspects of the corporate structure are compliant with the Regulations.
Accordingly, the top priority for the Dentist turned entrepreneur should be having the company correctly structured to obtain a Dental Corporation Permit from the College. This is vital, as without obtaining a permit, the Dentist is prohibited from practicing through the dental corporation.
In addition, when making future changes to the structure of the company, for tax purposes or otherwise, the Dentist must keep in mind their responsibility to ensure the corporation remains within the Regulations.
For further assistance with the establishment of a health profession corporation within British Columbia, or with the legal issues relating to the administration, compliance and operation of your health profession corporation please contact Paul Barbeau.