How to Set Up a Professional Corporation in Ontario Properly

Incorporating a professional corporation in Ontario is often presented as a straightforward process.

From a filing perspective, it can be.

What is often missed is that a professional corporation is not just a standard corporation with a different name.

It must meet specific requirements set by the governing body before it can be authorized to operate.

If those requirements are not built into the corporation from the outset, the incorporation may need to be amended or replaced before authorization can be obtained.

Incorporation and Authorization Are Two Separate Steps

A professional corporation involves two distinct stages:

• incorporation through ServiceOntario

• authorization from the applicable regulatory body

The first step creates the corporation.

The second determines whether it can be used for professional practice.

A corporation that is incorporated without reference to the regulator’s requirements may not be approved, even if the filing itself was completed correctly.

The Name Must Meet Regulatory Requirements

Naming is one of the most common issues with professional corporations.

Most regulators require that the name include:

• the surname of the licensed professional

• the regulated profession

• the words “Professional Corporation” or an approved abbreviation

Names that are acceptable for general business use are often not acceptable for professional corporations.

If the name does not comply, it will need to be changed before authorization can proceed.

Ownership and Share Structure Must Be Compliant

Professional corporations are subject to specific ownership rules.

In most cases:

• voting shares must be held by licensed members of the profession

• control must remain with the licensed professional

• non-licensed individuals are restricted in how they can participate

A standard share structure does not typically account for these requirements.

If the structure is not compliant, it will need to be corrected before authorization is granted.

The Corporation Must Align With the Regulator’s Rules

Each governing body may have its own requirements.

These can relate to:

• naming conventions

• ownership restrictions

• documentation required for authorization

• how the corporation is represented publicly

These requirements are not assessed at the incorporation stage.

They are assessed when applying for authorization.

Common Issues When Not Set Up Properly

We regularly see situations where:

• the corporation was incorporated under a general business name

• the required wording for a professional corporation was not included

• shares were issued without considering regulatory restrictions

• the structure does not meet authorization requirements

In these cases, the corporation exists but cannot be used for professional practice until it is corrected.

Setting It Up Properly From the Start

A properly structured professional corporation should:

• use a compliant corporate name

• reflect the correct ownership and control requirements

• align with the specific rules of the governing body

• be set up with authorization in mind from the outset

This avoids the need for amendments, delays, or restructuring later.

Why This Matters

Incorporating without considering professional corporation requirements often leads to:

• delays in obtaining a Certificate of Authorization

• additional filings and costs

• uncertainty about whether the structure is compliant

Setting up the corporation properly at the outset allows the authorization process to proceed more efficiently.

Book a Consultation

If you are planning to incorporate a professional corporation, it is worth ensuring the structure is aligned with your regulator’s requirements from the start.

This avoids delays and the need to correct the corporation later. You can Book a Consultation to walk through your situation and have your professional corporation set up properly from the outset.