Professional Corporation in Ontario: Who Can Incorporate and How

A professional corporation in Ontario is an OBCA corporation that holds a certificate of authorization from its regulatory college. Only members of the profession can own it. Physicians and dentists may also issue non-voting shares to certain family members. The name must include "Professional Corporation". Incorporating does not limit your professional liability.

This guide covers which professions can incorporate, the conditions in Ontario's Business Corporations Act (OBCA), the special rules for a medical or dental professional corporation, how the college certificate works and the steps in order.

What is a professional corporation in Ontario?

Section 3.1 of the OBCA defines a professional corporation as a corporation incorporated or continued under the OBCA that holds a valid certificate of authorization or similar document. That document is issued under the Act governing the profession. In practice there are two parts: an Ontario corporation, and a permit from your college letting that corporation practise.

Because of this definition, a professional corporation for an Ontario practice has to be an Ontario corporation. A federal (CBCA) corporation does not qualify. Professionals in other provinces follow their own province's rules. There is no single "professional corporation Canada" regime.

Which professions can incorporate in Ontario?

Under OBCA s. 3.1(2), a profession can practise through a professional corporation in two cases. Either its governing Act expressly allows it, or the profession is governed by one of these:

• an Act listed in Schedule 1 of the Regulated Health Professions Act, 1991, which covers physicians, dentists, pharmacists, nurses, physiotherapists, optometrists, chiropractors, psychologists and other regulated health professions
• the Chartered Professional Accountants of Ontario Act, 2017
• the Law Society Act, which covers lawyers and paralegals
• the Social Work and Social Service Work Act, 1998
• the Veterinarians Act

Each college then sets its own rules on names, applications and renewals.

What conditions must a professional corporation meet?

OBCA s. 3.2(2) sets five conditions:

1. Ownership: all issued shares must be legally and beneficially owned, directly or indirectly, by members of the same profession.
2. Officers and directors: every officer and director must be a shareholder.
3. Name: the name must include "Professional Corporation" or "société professionnelle" and follow the college's naming rules.
4. No number name: a numbered company such as "1234567 Ontario Inc." is not allowed.
5. Business restriction: the articles must say the corporation carries on only the practice of the profession. Related or ancillary activities are allowed, including investing surplus funds.

The OBCA also voids voting agreements or proxies that give the vote on a share to a non-shareholder. A unanimous shareholder agreement is void unless every shareholder is a member of the profession.

Can family members own shares in a medical or dental professional corporation?

Yes, but only for physicians and dentists, and only non-voting shares. Ontario Regulation 665/05 (Health Profession Corporations) replaces the ownership rule for these two professions:

The CPSO says step-children, step-parents and common-law spouses are accepted as family members, and parents-in-law are not. Family shareholders who are not physicians are not shown on the public register.

Having family shareholders does not mean dividends to them are taxed at their rates. Rules such as the tax on split income (TOSI) can apply, so get accounting advice before you design a share structure.

Does a professional corporation limit your liability?

Not for professional work. OBCA s. 3.4 says the usual shareholder protection does not limit a shareholder's professional liability. The corporation's acts count as the acts of its shareholders, employees or agents. Shareholders are jointly and severally liable with the corporation for professional liability claims arising while they were shareholders.

The corporation can still shield shareholders from ordinary business debts, such as a lease or a supplier contract, unless you sign a personal guarantee. Keep your malpractice or errors-and-omissions insurance either way.

What are the tax advantages of a professional corporation?

A professional corporation is taxed like other corporations. If it is a Canadian-controlled private corporation, active business income can qualify for the small business deduction. In Ontario the combined rate is 11.2% (9% federal plus 2.2% Ontario from July 1, 2026) on the first $500,000. Profit kept in the corporation is taxed at that lower rate until it is paid out to you as salary or dividends. This deferral is the main benefit.

The benefit depends on how much you leave in the corporation, any passive investment income and how you pay yourself. Every situation is different, so speak to an accountant before you incorporate. Our guide to sole proprietorship vs corporation explains the basics.

How do you set up a professional corporation in Ontario?

1. Check your college's requirements. Some colleges want the name approved before you incorporate. The Law Society of Ontario, for example, issues a name approval first. The RCDSO offers optional name pre-approval.
2. Choose a compliant name. The CPSO requires the physician's surname as it appears on the register, followed by "Medicine Professional Corporation". An example is "Smith Medicine Professional Corporation", with no extra words.
3. Incorporate under the OBCA. File articles of incorporation through the Ontario Business Registry. The articles must contain the professional-corporation restrictions. The government fee is $300, and a named corporation needs an Ontario-biased Nuans report.
4. Apply for the certificate of authorization. Submit your articles and the college's forms through its portal. The CPSO charges a $400 application fee, and the RCDSO $750. Both say processing takes about two to three weeks.
5. Start practising through the corporation only once the certificate is issued. The CPSO does not back-date certificates.
6. Set up the business side. Open a corporate bank account, update billing (for example, OHIP payment arrangements for physicians), and register for any CRA program accounts you need.

Our professional corporation service prepares the articles with the right clauses. Our service for physicians, dentists and health professionals covers the college-specific details.

What ongoing filings does a professional corporation have?

A missed renewal is serious. An RCDSO certificate not renewed by August 31 is revoked on September 1 and cannot be renewed. The corporation must apply again. See our Ontario annual return guide for the registry side.