A Professional Corporation Is Not a Standard Business Corporation

A standard Ontario corporation can be formed with relatively few restrictions.

A psychotherapy professional corporation is subject to additional requirements that are assessed by the regulator before it can be used.

This distinction is often missed where incorporation is completed first and regulatory requirements are reviewed later.

At that stage, the corporation may need to be amended or replaced before authorization can proceed.

Ownership and Control Requirements

A psychotherapy professional corporation must meet specific ownership requirements.

In general:

• voting shares must be owned by a Registered Psychotherapist

• control of the corporation must remain with a licensed professional

• non-licensed individuals cannot participate in ownership in the same way as a standard corporation

This differs from a general corporation, where ownership can be broadly structured without reference to licensing.

Corporate Naming Requirements

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

The name must comply with CRPO requirements, which typically include:

• the surname of the psychotherapist as it appears on the register

• reference to the profession

• the words “Professional Corporation”

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

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

Incorporation and Authorization Process

Unlike a standard business, a psychotherapy professional corporation involves both incorporation and regulatory approval.

In practice, this requires:

• ensuring the proposed structure meets CRPO requirements

• incorporating the corporation with those requirements in mind

• applying for a Certificate of Authorization from the CRPO

If the corporation is not aligned with the regulator’s requirements, the authorization process may be delayed or may not proceed.

Scope of Activities

A psychotherapy professional corporation is limited in the services it can provide.

It must operate within the scope of the profession.

This means the corporation is generally restricted to psychotherapy services and activities related to the practice.

If additional services are offered, they may need to be structured through a separate entity.

Common Issues When Not Set Up Properly

We regularly see situations where:

• the corporation was incorporated as a standard business corporation

• the name does not meet CRPO requirements

• the share structure does not comply with ownership rules

• the authorization process cannot proceed

In these cases, the corporation exists but cannot be used in its current form.

When Incorporation Makes Sense

Incorporation is not required to operate a psychotherapy practice.

It is typically considered where:

• income is consistent and exceeds personal needs

• earnings are being retained in the business

• the practice is growing or expanding

• there is a need for a more structured business framework

The decision should be based on how the practice operates and where it is expected to go.

Setting It Up Properly From the Outset

A properly structured psychotherapy professional corporation should:

• comply with CRPO naming requirements

• reflect appropriate ownership and control

• align with the regulator’s authorization process

• support the operation of the practice

Addressing these elements at the outset avoids delays and the need for restructuring later.

Book a Consultation

If you are considering incorporating your psychotherapy practice or are unsure whether your current structure meets CRPO requirements, it is worth reviewing this before proceeding.

Professional corporations must be aligned with regulatory requirements from the outset. You can Book a Consultation to walk through your situation and have your corporation set up or corrected properly.