Bill 4 2013

An Act respecting health profession corporations

Note: This Act amends or repeals more than one Act.  For the legislative history of these Acts, see the Table of Consolidated Public Statutes – Detailed Legislative History at www.e-Laws.gov.on.ca.

Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

Regulated Health Professions Act, 1991

   1.  The Regulated Health Professions Act, 1991 is amended by adding the following sections:

Health Profession Corporations

Corporations eligible to hold certificate of authorization

Definitions

   34.2  (1)  In this section,

"family member" means, in relation to a shareholder, the shareholder's spouse, child or parent; ("membre de la famille")

"spouse" means, in relation to a shareholder, a person to whom the shareholder is married or with whom the shareholder is living in a conjugal relationship outside marriage; ("conjoint")

"voting member shareholder" means, in relation to a corporation, a member of a College who owns voting shares of the corporation. ("actionnaire membre avec droit de vote")

Eligibility to hold certificate of authorization

   (2)  A corporation is eligible to hold a certificate of authorization issued by a College if the following conditions are met:

    1.  The articles of the corporation provide that the corporation cannot carry on a business other than the practice of the profession governed by the College and activities related to or ancillary to the practice of that profession.

    2.  Each issued and outstanding voting share of the corporation is legally and beneficially owned, directly or indirectly, by a member of the College and each issued and outstanding non-voting share of the corporation is owned in one of the following ways:

            i.          It is legally and beneficially owned, directly or indirectly, by a member of the College.

           ii.          It is legally and beneficially owned, directly or indirectly, by a family member of a voting member shareholder.

          iii.          It is owned legally by one or more individuals, as trustees, in trust for one or more children of a voting member shareholder who are minors, as beneficiaries.

    3.  The name of the corporation meets the standards described in subsections (3) to (6).

   (3)  The name of the corporation must meet the requirements in section 3.2.1 of the Business Corporations Act and must not violate the provisions of any other Act.

   (4)  The name of the corporation must include the surname of one or more shareholders of the corporation who are members of the College, as the surname is set out in the College register, and may also include the shareholder's given name, one or more of the shareholder's initials or a combination of his or her given name and initials.

   (5)  The name of the corporation must indicate the health profession to be practised by members of the College through the corporation.

   (6)  The name of the corporation must not include any information other than the information permitted or required by subsections (3), (4) and (5).

Duty to give Registrar declaration upon shareholder change

   34.3  (1)  At the time that a corporation holding a certificate of authorization issued by a College notifies the Registrar under section 85.9 of the Code of a change in the shareholders of the corporation, the corporation shall also give the Registrar the statutory declaration of a director of the corporation, executed after the change of shareholders, certifying that the corporation is in compliance with section 3.2.1 of the Business Corporations Act, including the regulations made under that section, as of the date the statutory declaration is executed.

Revocation of certificate

   (2)  A corporation's certificate of authorization may be revoked if it fails to give the Registrar a statutory declaration in accordance with subsection (1).

Business Corporations Act

   2.  Subsection 3.1 (1) of the Business Corporations Act is amended by adding the following definition:

"health profession corporation" means a corporation incorporated under this Act that holds a valid certificate of authorization issued by a College under the Regulated Health Professions Act, 1991 or the Health Professions Procedural Code set out in Schedule 2 to that Act; ("société professionnelle de la santé")

   3.  (1)  Subsection 3.2 (1) of the Act is amended by striking out "with respect to a professional corporation except" and substituting "with respect to a professional corporation, other than a health profession corporation, except".

   (2)  Subsection 3.2 (2) of the Act is amended by striking out "but subject to subsection (6)" in the portion before paragraph 1.

   (3)  Subsection 3.2 (6) of the Act is repealed.

   4.  The Act is amended by adding the following section:

Application of Act to health profession corporations

Definitions

   3.2.1  (1)  In this section,

"College" means the College of a health profession or group of health professions established or continued under an Act named in Schedule 1 to the Regulated Health Professions Act, 1991; ("ordre")

"family member" means, in relation to a shareholder of a health profession corporation, the shareholder's spouse, child or parent; ("membre de la famille")

"health profession" means a health profession as set out in Schedule 1 to the Regulated Health Professions Act, 1991; ("profession de la santé")

"member" means a member of a College; ("membre")

"voting member shareholder" means, in relation to a health profession corporation, a member of the College who owns voting shares of the corporation. ("actionnaire membre avec droit de vote")

Application

   (2)  This Act and the regulations apply with respect to a health profession corporation except as otherwise set out in this section, subsection 3.1 (2), sections 3.3 and 3.4 and the regulations.

Conditions for health profession corporations

   (3)  Despite any other provision of this Act, a health profession corporation shall satisfy all of the following conditions:

    1.  Each issued and outstanding voting share of the corporation shall be legally and beneficially owned, directly or indirectly, by a member of the College.

    2.  Each issued and outstanding non-voting share of the corporation shall be owned in one of the following ways:

            i.  It shall be legally and beneficially owned, directly or indirectly, by a member of the College.

           ii.  It shall be legally and beneficially owned, directly or indirectly, by a family member of a voting member shareholder.

          iii.  It shall be owned legally by one or more individuals, as trustees, in trust for one or more children of a voting member shareholder who are minors, as beneficiaries.

    3.  All officers and directors of the corporation shall be shareholders of the corporation who are members of the College.

    4.  The name of the corporation shall include the words "Professional Corporation" or "Société professionnelle" and shall comply with the rules respecting the names of professional corporations set out in the regulations and with the rules respecting names set out in the regulations or by-laws made under the Act governing the health profession.

    5.  The corporation shall not have a number name.

    6.  The articles of incorporation of the corporation shall provide that the corporation may not carry on a business other than the practice of the health profession but this paragraph shall not be construed to prevent the corporation from carrying on activities related to or ancillary to the practice of the health profession, including the investment of surplus funds earned by the corporation.

Deemed compliance

   (4)  A health profession corporation that has a name that includes the words "société professionnelle" shall be deemed to have complied with the requirements of subsection 10 (1).

Corporate acts not invalid

   (5)  No act done by or on behalf of a health profession corporation is invalid merely because it contravenes this Act.

Voting agreements void

   (6)  An agreement or proxy that vests the right to vote the rights attached to a voting share of a health profession corporation in a person other than a shareholder of the corporation who is a member of the College is void.

Unanimous shareholder agreements

   (7)  A unanimous shareholder agreement in respect of a health profession corporation is void unless each voting shareholder of the corporation is a member of the College and each non-voting shareholder of the corporation is,

  (a)  a member of the College;

  (b)  a family member of a voting member shareholder; or

   (c)  a trustee under a trust described in subparagraph 2 iii of subsection (3).

Same, exemption from s. 108 (5)

   (8)  A health profession corporation, its shareholders and its directors and officers are exempt from the application of subsection 108 (5) and, in lieu of that subsection, the following rule applies:

    1.  A shareholder of a health profession corporation who is a party to a unanimous shareholder agreement in respect of the corporation and who is a member of the College has all the rights, powers, duties and liabilities, whether arising under this Act or otherwise, of a director of the corporation to the extent that the agreement restricts the discretion or powers of the directors to manage or supervise the management of the business and affairs of the corporation, and the directors are thereby relieved of their duties and liabilities, including any liabilities under section 131, to the same extent.

Exemptions from s. 3.4 (2), (4) and (6)

   (9)  A non-voting shareholder of a health profession corporation who is not a member of the College is exempt from the application of subsections 3.4 (2), (4) and (6).

Regulations

   (10)  The Lieutenant Governor in Council may make regulations,

  (a)  exempting classes of health profession corporations from such provisions of this Act and the regulations as may be specified and prescribing terms and conditions that apply with respect to the health profession corporation in lieu of the provisions from which they are exempt;

  (b)  exempting classes of the shareholders of those health profession corporations from the application of subsections 3.4 (2), (4) and (6) and such other provisions of this Act and the regulations as may be specified and prescribing rules that apply with respect to the shareholders in lieu of the provisions from which they are exempted;

   (c)  exempting directors and officers of those health profession corporations from the application of such provisions of this Act and the regulations as may be specified and prescribing rules that apply with respect to the directors and officers in lieu of the provisions from which they are exempted.

Commencement and Short Title

Commencement

   5.  This Act comes into force on the day it receives Royal Assent.

Short title

   6.  The short title of this Act is the Health Profession Corporations Statute Law Amendment Act, 2013.

 

EXPLANATORY NOTE

Currently, the Regulated Health Professions Act, 1991 and the Business Corporations Act authorize physicians and dentists to create health profession corporations.  Those health profession corporations are subject to special treatment in respect of ownership by a dentist's or physician's family members.  The Bill amends both Acts to extend this special treatment to all regulated health professions.