Buying or Selling a Chiropody or Podiatry Practice in Ontario: Legal Considerations
Buying or selling a chiropody or podiatry practice is not an ordinary small-business transaction. The deal may involve professional-corporation restrictions, patient records, continuity of care, unfinished orthotic orders, practitioner agreements, a commercial lease, privacy obligations and regulatory notifications.
The parties must protect the value of the business without treating patients or their personal health information as commercial property. They must also decide which assets and liabilities are changing hands, how the seller will transition out, and what the buyer needs to operate the clinic safely on the day after closing.
This guide explains the major legal issues Ontario chiropodists, podiatrists and foot care clinic owners should consider when purchasing or selling a practice.
Start Planning Before the Practice Is Listed
A seller should begin preparing well before speaking with potential buyers. Early preparation can expose problems that might otherwise reduce the purchase price, delay closing or cause a buyer to walk away.
The seller should review:
the clinic’s corporate records and ownership structure;
the status of any professional corporation and Certificate of Authorization;
the commercial lease and assignment provisions;
associate, contractor and employment agreements;
ownership of the business name, domain and website;
equipment leases and financing;
laboratory, supplier and technology contracts;
financial statements, tax filings and billing records;
patient-record and privacy practices;
outstanding complaints, claims or regulatory matters;
incomplete treatments, orthotic orders and patient credits; and
insurance coverage.
The goal is to identify what can actually be sold and what consents, renewals or corrections will be required. A seller who waits until due diligence to address missing agreements or incomplete corporate records may lose negotiating leverage.
A buyer should also prepare in advance by confirming financing, ownership eligibility, professional-corporation requirements, desired locations, clinical scope and the type of practice they are equipped to operate.
Asset Purchase or Share Purchase?
One of the first structural decisions is whether the buyer will purchase selected assets of the practice or the shares of the corporation that operates it.
Asset purchase
In an asset transaction, the buyer purchases specified assets and assumes only the liabilities identified in the agreement. The assets may include:
equipment, furniture and inventory;
the clinic name and goodwill;
telephone numbers, domain names and social media accounts;
assignable supplier and service contracts;
leasehold improvements;
certain receivables or prepaid amounts;
intellectual property and operational materials; and
rights relating to the transition of the practice, subject to privacy and professional obligations.
Buyers often prefer an asset purchase because they can select the assets and liabilities they are willing to acquire. However, the buyer may need new contracts, licences, permits, tax accounts, insurance and a lease assignment or new lease. Each asset must be legally transferred.
Share purchase
In a share transaction, the buyer acquires the shares of the existing corporation. The corporation generally continues to own the same assets, remain party to its contracts and retain its liabilities.
A share purchase may simplify the transfer of certain contracts and business assets, but it can expose the buyer to historical liabilities within the corporation, including tax, employment, privacy, billing and contractual risks. Due diligence, representations, indemnities and appropriate holdbacks become especially important.
The seller and buyer may have different tax preferences. The allocation of purchase price among equipment, inventory, goodwill and other assets can affect them differently. Each party should obtain independent legal and accounting advice before committing to a structure or price allocation.
Professional Corporation Restrictions May Limit the Deal Structure
If the clinic operates through a chiropody professional corporation, a share sale is not available to every buyer.
The College of Chiropodists of Ontario states that all issued and outstanding shares of a health profession corporation must be legally and beneficially owned, directly or indirectly, by one or more College registrants of the same profession. It also states that all officers and directors must be shareholders and that the corporation’s articles must restrict its business to the practice of the profession and related or ancillary activities.
The buyer must therefore confirm that the proposed ownership and governance structure will comply at closing. A non-registrant investor generally cannot simply purchase the professional corporation’s shares as they might purchase an ordinary company.
The transaction may require:
a transfer of shares to an eligible registrant;
director and officer changes;
updates to corporate registers;
amendments or confirmations relating to the corporation’s name and articles;
notification to the College;
a new or updated Certificate of Authorization application; and
updates to the Ontario Business Registry and Canada Revenue Agency.
The College renews professional-corporation Certificates of Authorization annually and requires current information about shareholders, directors, officers and practice premises. The parties should contact the College early enough to confirm the steps and timing applicable to the proposed transaction.
Confidentiality Agreement and Letter of Intent
Before the seller provides sensitive business information, the parties should consider signing a confidentiality agreement. It should limit how the buyer may use financial, operational and commercial information and require the return or destruction of material if the transaction does not proceed.
Patient information requires additional care. A general confidentiality agreement does not automatically authorize broad disclosure of identifiable personal health information. The seller should determine what information can lawfully be shared, use aggregated or de-identified information where appropriate and comply with the Personal Health Information Protection Act, 2004, or PHIPA.
Once preliminary discussions progress, the parties may sign a letter of intent. It may address:
the proposed price and payment structure;
whether the deal is an asset or share purchase;
included and excluded assets;
assumed and excluded liabilities;
a deposit;
due diligence;
financing;
lease assignment or a new lease;
regulatory and third-party approvals;
the seller’s transition period;
exclusivity while the parties negotiate;
confidentiality; and
a target closing date.
The letter should clearly identify which provisions are binding and which remain subject to a definitive purchase agreement. A short or informal letter can still create disputes if its legal effect is unclear.
Valuation, Goodwill and Purchase Price
The value of a foot care practice may reflect equipment, inventory, location, lease terms, trained staff, operating systems, referral relationships, revenue history and goodwill.
Goodwill requires careful treatment. The buyer is not purchasing ownership of patients or a guarantee that patients will remain with the clinic. The College’s current discontinuation guideline confirms that patients must be told when another registrant is taking over and must be given the option to seek care elsewhere. Patients have the right to choose their healthcare provider.
The agreement should specify how the purchase price is allocated among the assets.
The Canada Revenue Agency notes that a business sale may allocate amounts to individual assets, inventory and goodwill. Those allocations can have tax consequences and should be consistent between buyer and seller.
The purchase price may be paid:
entirely at closing;
through a deposit and closing payment;
partly through vendor financing;
with a holdback for indemnity claims or unresolved adjustments; or
through an earnout tied to specified post-closing results.
Earnouts based on patient retention or future revenue should be drafted carefully.
The parties should define the calculation, accounting methods, buyer’s operational discretion, access to records, exclusions, dispute process and payment timing. The structure must not encourage inappropriate patient solicitation, interfere with patient choice or create privacy problems.
Buyer Due Diligence
Due diligence allows the buyer to confirm what it is purchasing and identify liabilities before closing. The scope should reflect the size and structure of the clinic.
Corporate and regulatory matters
The buyer should review:
articles, bylaws, minute books and share records;
corporate status and ownership;
the professional corporation’s Certificate of Authorization;
College registration and public-register information;
required permits and business-name registrations;
regulatory complaints, investigations, undertakings or orders; and
professional liability insurance.
Financial and billing matters
The buyer should examine financial statements, tax returns, revenue by service line, accounts receivable, prepaid amounts, patient credits, refunds, chargebacks and supplier balances.
Billing diligence should consider whether invoices and insurer submissions properly identify the treating registrant and accurately describe services and products. A buyer should not value recurring revenue without understanding how it was generated.
Contracts
The buyer should review:
the commercial lease;
associate and contractor agreements;
employment agreements;
laboratory and orthotic supplier agreements;
equipment leases and financing;
electronic medical record and booking-platform contracts;
payment-processing arrangements;
marketing and website agreements; and
any referral, management or space-sharing arrangements.
The buyer must determine whether each contract can be assigned, whether consent is required and whether a change-of-control provision applies to a share sale.
Privacy, records and technology
The buyer should assess the clinic’s privacy framework without improperly accessing identifiable patient information. Relevant diligence may include:
identifying the health information custodian;
privacy policies and notices;
privacy-officer responsibilities;
record retention and destruction procedures;
access controls and audit logs;
electronic medical record ownership and export rights;
past privacy complaints or breaches;
agreements with technology providers;
backup and cybersecurity practices; and
the process for transferring records to a successor.
If material weaknesses are discovered, the agreement may require remediation before closing, a price adjustment, a holdback or a specific indemnity.
Clinical operations
The buyer should also understand:
services provided and the equipment needed for them;
sterilization systems and logs;
infection prevention and control policies;
equipment maintenance records;
medication or supply storage;
incomplete treatment plans;
outstanding orthotics and footwear orders;
remakes, warranties and patient refunds; and
any incident or complaint trends.
The purpose is not to second-guess professional judgment. It is to identify operational obligations and liabilities that will exist after closing.
Seller Due Diligence on the Buyer
The seller should not assume that only the buyer needs to investigate. The seller should confirm that the buyer is eligible and capable of completing the transaction and managing the transition.
Relevant questions include:
Is the buyer registered and entitled to practise in Ontario?
Can the buyer legally own shares of the professional corporation?
Does the buyer have financing?
Can the buyer obtain the necessary lease and insurance?
Will the buyer have appropriate staffing, systems and clinical capacity at closing?
Can the buyer securely receive and maintain patient records?
Does the buyer understand outstanding care, orthotic and warranty obligations?
The seller may remain professionally and contractually exposed if the transition is mishandled. The agreement should not rely on vague promises that the buyer will “take care of everything.”
Patient Records and PHIPA
Patient records are not ordinary sale assets. The purchase agreement must identify who currently has custody or control, who will become the successor custodian, when responsibility changes and how records will be protected.
The Information and Privacy Commissioner of Ontario explains that a custodian generally remains responsible for records until complete custody and control passes to a person legally authorized to hold them. When complete custody or control transfers to a successor, the successor becomes the custodian. The outgoing custodian must make reasonable efforts to notify patients before the transfer or, if that is not reasonably possible, as soon as possible afterward.
The College’s 2025 Discontinuation of Services Guideline specifically states that when a registrant sells a practice:
patients must receive notice even if another registrant is taking over;
patients must have the option to seek care elsewhere;
records may be transferred to the successor;
reasonable efforts must be made to notify patients before the transfer or as soon as possible afterward;
records must be transferred securely; and
the purchase agreement should allow the seller to access records if required for legal reasons.
The agreement should address:
the identity of the outgoing and successor custodians;
the effective time of transfer;
patient notification;
secure migration or physical delivery;
validation that electronic records were transferred completely;
handling of records for patients who choose another provider;
access and correction requests during the transition;
retention and secure destruction;
seller access for legal, insurance, regulatory or defence purposes;
responsibility for storage and retrieval costs; and
breach response if information is lost or accessed improperly.
Due diligence should be designed to avoid unnecessary disclosure of identifiable health information. Patient lists should not be treated as ordinary marketing lists, and the buyer should not contact patients before the legally appropriate transition process.
Patient Notice and Continuity of Care
The seller and buyer should create a communication plan before closing. The notice should be accurate, neutral and consistent with PHIPA and College requirements.
It may explain:
the seller’s last day or transition period;
the buyer’s identity and qualifications;
whether the clinic will remain at the same location;
how ongoing care will be handled;
how patients can obtain or transfer their records;
that patients may choose another provider; and
who to contact with questions.
The parties should identify patients who require active follow-up, recent procedures, pending referrals, laboratory results or ongoing treatment. The College states that necessary continuity arrangements must be made and documented.
A transaction should not close with both parties assuming that the other will contact patients or complete the handover. The purchase agreement should assign responsibility and set deadlines.
Outstanding Orthotics, Footwear and Treatment Obligations
Foot care practice sales require special attention to unfinished custom orthotics, prescription footwear and other products.
The College’s discontinuation guideline states that a departing registrant is responsible for arranging appointments for patients whose orthotics have not been dispensed and that undisposed orthotics must be dispensed before the registrant closes or leaves. The guideline also recommends including a plan for failed treatments in the purchase and sale agreement and, ideally, having the seller complete treatments before departure.
The parties should prepare a closing list of:
assessments completed but not yet ordered;
deposits received;
products ordered but not received;
orthotics received but not dispensed;
follow-up appointments;
remakes and adjustments;
warranties and supplier claims;
refunds and credits; and
disputed charges.
The agreement should state who will complete each obligation, who bears the cost and how related revenue or deposits will be adjusted at closing.
Commercial Lease and Premises
The value of the practice may depend heavily on remaining in its location. A buyer should review the lease before finalizing the purchase price.
Issues may include:
remaining term and renewal options;
rent and additional rent;
permitted use;
assignment and change-of-control restrictions;
landlord consent and fees;
personal guarantees;
repair and restoration obligations;
ownership of leasehold improvements;
signage and parking;
exclusivity; and
relocation, demolition or redevelopment rights.
An asset purchase often requires a lease assignment or new lease. A share purchase may still trigger a change-of-control provision. The transaction should usually be conditional on obtaining acceptable arrangements with the landlord.
If the seller guaranteed the lease, the seller should seek a written release at closing. A share transfer alone does not necessarily release a personal guarantee.
Employees and Associate Practitioners
The buyer must decide which employees and associates it wants to retain. The structure of the transaction affects how existing relationships continue.
Ontario’s Employment Standards Act contains continuity-of-employment rules where a purchaser employs an employee of the seller following a sale of the business. The buyer and seller should not assume that an asset purchase automatically erases prior service or employment liabilities.
The parties should review:
employment and contractor classification;
written agreements;
compensation, vacation and benefits;
accrued entitlements;
termination provisions;
restrictive covenants;
privacy and confidentiality obligations;
practitioner billing and record responsibilities; and
whether consent is required to assign any agreement.
Communications with staff and associates should be timed carefully. The purchase agreement should allocate responsibility for offers, terminations, accrued amounts and claims.
Representations, Warranties and Indemnities
The purchase agreement normally contains statements by the seller about the condition of the business. Depending on the transaction, the seller may make representations concerning:
authority and ownership;
financial statements and taxes;
contracts and lease compliance;
employees and contractors;
litigation and regulatory matters;
billing practices;
privacy and security;
patient-record management;
equipment and inventory;
intellectual property;
insurance; and
absence of undisclosed liabilities.
The buyer may also provide representations about its authority, financing, professional registration and eligibility to own the corporation.
The indemnity provisions should explain what happens if a representation is inaccurate or a pre-closing liability later appears. The agreement may include survival periods, liability caps, deductibles, exclusions, holdbacks and procedures for third-party claims.
Privacy, tax, employment and regulatory liabilities may warrant different treatment from ordinary contractual claims.
Restrictive Covenants and the Seller’s Transition
The buyer may seek non-competition, non-solicitation, confidentiality and non-interference covenants to protect the goodwill being purchased. These provisions must be drafted for the transaction and assessed under current law.
A restrictive covenant connected to the sale of a business is evaluated differently from a clause in an ordinary employment agreement, but it is not automatically enforceable. Its duration, geography, prohibited activities and connection to the purchased goodwill matter.
The seller’s transition obligations may include:
introducing the buyer to staff, suppliers and referral sources;
working in the clinic for a defined period;
assisting with patient communications;
completing outstanding treatments;
helping transfer operational knowledge; and
being available for reasonable post-closing questions.
The agreement should distinguish services included in the purchase price from separately paid transition services. It should also define the seller’s professional independence, schedule, insurance and liability during any transition period.
Closing Conditions and Documents
The transaction should not close until essential conditions have been satisfied or waived. These may include:
satisfactory legal, financial and operational due diligence;
financing approval;
landlord consent or a new lease;
College and professional-corporation requirements;
required third-party contract consents;
confirmation of insurance;
completion of required corporate steps;
agreement on patient notification and record transfer;
an acceptable list of unfinished treatments and patient credits; and
no material adverse change before closing.
Closing documents may include:
the purchase agreement;
bills of sale and assignments;
share-transfer documents;
corporate resolutions and resignations;
lease assignment or new lease documents;
restrictive-covenant and transition agreements;
releases;
a closing statement and purchase-price adjustments;
tax elections where applicable;
record-transfer acknowledgements;
bring-down certificates; and
keys, passwords, equipment records and other operational deliveries.
The parties should also prepare a detailed closing agenda identifying each document, responsible party and deadline.
Tax and Accounting Coordination
Legal and tax advice should be coordinated before the purchase agreement is finalized. The transaction structure and allocation of price can materially affect both parties.
The Canada Revenue Agency notes that, in qualifying asset sales where the purchaser acquires all or substantially all of the property necessary to carry on the business, the parties may be able to make a joint election so that no GST/HST is payable on the sale. The election has specific conditions and does not apply to every transaction or every component of the deal.
The parties should obtain accounting advice on:
asset versus share treatment;
allocation among inventory, equipment, goodwill and other assets;
applicable GST/HST;
accounts receivable and work in progress;
employee payroll matters;
vendor financing and interest;
tax elections; and
post-closing filing obligations.
The legal agreement should reflect the tax structure actually recommended by the parties’ accountants.
Common Mistakes in Foot Care Practice Sales
Common problems include:
agreeing on a price before confirming whether the deal will be an asset or share purchase;
assuming anyone can purchase shares of a professional corporation;
disclosing patient information too broadly during due diligence;
treating the patient list as an ordinary marketing asset;
failing to make the deal conditional on lease arrangements;
ignoring change-of-control clauses in contracts;
leaving unfinished orthotics, deposits and patient credits unresolved;
failing to document post-closing access to records;
using a generic purchase agreement that does not address regulated care;
overlooking employee continuity rules;
allowing the seller’s transition duties to remain vague; and
waiting until closing to contact the College, landlord, insurer or technology provider.
Purchase and Sale Checklist
Before closing, the parties should confirm that they have addressed:
Asset versus share structure.
Professional-corporation ownership eligibility.
Price, allocation, payment terms and adjustments.
Confidentiality and lawful due diligence.
Corporate, financial, tax and regulatory review.
Commercial lease assignment or replacement.
Employees, associates and contractor arrangements.
Patient notification and freedom to choose another provider.
Custody, secure transfer and post-closing access to records.
Active treatments, outstanding orthotics, refunds and credits.
Supplier, software and equipment contracts.
Insurance and tail-coverage considerations.
Seller transition and restrictive covenants.
Representations, indemnities, caps and holdbacks.
College, corporate, tax and third-party closing steps.
Legal Support for Buying or Selling a Foot Care Practice
Delta Law assists Ontario chiropodists, podiatrists and clinic owners with letters of intent, due diligence, purchase and sale agreements, professional-corporation matters, lease transfers, associate agreements, patient-record provisions and closing documents.
Learn more about our legal services for chiropodists and podiatrists.
This article provides general information and does not constitute legal, tax or accounting advice. Advice depends on the facts of each transaction.
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