Certification and Licensing
- Governing bodies (e.g., Law Society of Ontario and Royal College of Dental Surgeons of Ontario) are responsible for approving and licensing professional corporations in their fields. A Certificate of Authorization from the relevant authority is mandatory before the corporation can legally provide professional services.
- Governing bodies often require that all voting shares, and sometimes all shares, be owned by licensed members of the profession. They may also regulate whether other entities, such as holding companies, can own shares and under what restrictions.
Ongoing Regulation and Oversight
- Professional corporations must comply with both the Ontario Business Corporations Act and additional rules imposed by the governing body. This can include limits on who can direct the corporation, who may serve as an officer, and what activities the corporation may engage in.
- These bodies impose annual renewal requirements, code of conduct obligations, ongoing reporting, and other practice-related standards.
Accountability and Disciplinary Powers
- Unlike most business corporations, professional corporations are "transparent" to their governing body, which has the power to "look through" the corporate structure. This means the regulatory authority can directly hold individual shareholders (i.e., the professional members) accountable for professional misconduct or maladministration.
- If required, the governing body can take disciplinary or enforcement action against individual licensees or revoke the corporation’s Certificate of Authorization for breaches of professional standards.
Naming and Practice Rules
- Strict naming conventions are enforced: the corporation’s name must usually include the profession, a shareholder’s surname, and the phrase “Professional Corporation”.
- The articles of incorporation must restrict the business to the regulated profession and related activities; the governing body reviews and enforces this limitation.
In essence, while incorporation offers significant administrative and tax advantages, it does not diminish the professional obligations or accountability of the individual practitioners, with the governing body serving as the ultimate authority over conduct, operation, and continued licensing of the professional corporation.
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