How to Fix a Non Compliant Professional Corporation in Ontario

Many regulated professionals discover compliance issues with their professional corporation long after incorporation. Often, everything appears fine on the surface until a regulator inquiry, audit, complaint, financing request, or internal review reveals gaps.

Non compliance does not automatically mean misconduct. In many cases, it results from misunderstandings about professional corporation rules or incomplete advice during incorporation.

What Does Non Compliance Mean for a Professional Corporation?

A professional corporation may be considered non compliant when it does not meet one or more requirements imposed by:

• Corporate legislation

• The governing professional statute

• The applicable regulatory body

Non compliance can relate to authorization, ownership, naming, operations, or ongoing regulatory obligations.

Importantly, a corporation can be legally incorporated while still being non compliant from a regulatory perspective.

Common Signs a Professional Corporation May Be Non Compliant

Professionals often begin to suspect issues when:

• They are unsure whether a Certificate of Authorization was obtained

• The corporation name does not follow professional naming rules

• Shares were issued without clear regulatory guidance

• Non professionals hold ownership or control where restricted

• The corporation was set up by an online service or accountant without regulator involvement

• Renewal or reporting obligations were missed

Uncertainty itself is often a signal that a review is needed.

Step One: Identify the Source of Non Compliance

Fixing a non compliant professional corporation begins with identifying the issue.

Common problem areas include:

• Missing or expired Certificate of Authorization

• Incorrect or non compliant corporate name

• Improper share ownership or voting control

• Misalignment between corporate structure and regulator rules

• Operating before authorization was granted

Each issue requires a different solution, so clarity at this stage is critical.

Step Two: Review Regulator Requirements Carefully

Each professional regulator in Ontario has its own rules governing professional corporations.

These rules address:

• Who may own shares

• Who may exercise control

• What naming conventions must be followed

• Whether non voting shares are permitted

• What reporting or renewal obligations apply

Fixing non compliance requires aligning the corporation precisely with these rules.

Step Three: Correct Structural or Authorization Issues

Depending on the issue, corrective steps may include:

• Applying for or renewing a Certificate of Authorization

• Amending the corporate name to meet regulator standards

• Reissuing or restructuring share ownership

• Updating corporate records and resolutions

• Correcting filings with corporate registries

In many cases, regulators permit corrections when issues are addressed proactively and transparently.

Step Four: Address Timing and Operational Concerns

If the corporation operated while non compliant, additional considerations may arise.

These can include:

• Whether retroactive authorization is permitted

• Whether disclosure to the regulator is required

• Whether changes must be implemented before continued operation

• Whether insurance or contractual issues need review

Handling timing carefully reduces regulatory and professional risk.

Why Ignoring Non Compliance Is Risky

Some professionals choose to ignore potential issues, hoping they will not surface.

This approach often leads to:

• Increased regulatory exposure

• Stress during audits or complaints

• Delays during financing or lease negotiations

• Complications when bringing on partners or associates

Addressing non compliance early preserves flexibility and reduces disruption.

What Professionals Often Say After Fixing Compliance Issues

After completing a compliance review and correction, many professionals say they:

• Were relieved to understand the rules clearly

• Had underestimated the complexity of professional corporations

• Felt more confident in their practice structure

• Would have addressed the issue earlier if they had known

Most corrections are manageable when approached properly.

How to Prevent Future Compliance Issues

Once compliance is restored, prevention becomes the focus.

Best practices include:

• Periodic legal review of corporate structure

• Monitoring regulator updates and rule changes

• Coordinating corporate changes with regulatory requirements

• Avoiding structural changes without professional guidance

Professional corporations are not static. Ongoing attention matters.

When Legal Guidance Is Especially Important

Legal support is particularly valuable when:

• Correcting ownership or control issues

• Dealing with regulator inquiries

• Coordinating corporate and regulatory filings

• Planning growth, partnerships, or succession

Professional corporations sit at the intersection of corporate and regulatory law, making specialized guidance important.

Book a Consultation

If you are concerned that your professional corporation may be non compliant, or if you want to proactively review and correct any issues, you can Book a Consultation to assess your structure and determine the appropriate next steps.