To form a Medicine Professional Corporation (MPC) in Ontario, you must comply with both provincial corporate law and College of Physicians and Surgeons of Ontario (CPSO) regulations. Generally, only licensed physicians can hold voting shares, but you may legally issue non-voting shares to your spouse, children, or parents, with current government and CPSO filing fees starting around $700 CAD.
When an Ontario medical practice grows, many doctors begin looking at incorporation to optimize their tax planning and save for retirement. Forming a Medicine Professional Corporation (MPC) offers significant advantages, including the ability to retain earnings within the company at a much lower corporate tax rate. However, unlike a standard business, a professional corporation is heavily regulated. The rules are strict to ensure that a physician’s professional liability and ethical obligations to patients always remain the top priority.
Whether you are opening a family practice in Toronto, joining a busy specialty clinic in Mississauga, or operating out of a local hospital in Ottawa, the legal requirements remain the same across the province. A common misconception is that incorporating completely shields a doctor from all liability; in reality, it does not protect against professional medical malpractice. Because of the complex interplay between the Business Corporations Act and the Regulated Health Professions Act, most doctors choose to hire an experienced corporate lawyer or a specialized law firm to set up the corporate structure correctly.
Step-by-Step Process for Forming an MPC in Ontario
Setting up an MPC is a multi-step journey. If you skip a step or file the wrong articles, the CPSO will reject your application for a Certificate of Authorization. This rejection can delay your ability to bill the Ministry of Health under your new corporate entity.
Step 1: Incorporating with the Ministry of Public and Business Service Delivery
📝 The first step is legally creating the entity. You must file Articles of Incorporation in Ontario. The name of the corporation must strictly follow CPSO naming guidelines. Generally, it must include your surname as it appears on the College register, followed by “Medicine Professional Corporation” (for example, “Dr. Jane Doe Medicine Professional Corporation”). You cannot use numbered companies or trade names for the actual legal entity name.
Step 2: Structuring the Corporate Shares and Directors
This is where many unguided applicants make critical errors. Under Ontario law, all officers and directors of an MPC must be shareholders of the corporation, and all voting shares must be owned by members of the CPSO. However, you are permitted to issue non-voting shares to your family members. Specifically, non-voting shares can only be held by a spouse, a child, or a parent of the voting physician shareholder. Setting up this share structure properly is crucial for future dividend distributions and tax planning.
Step 3: Applying to the CPSO for a Certificate of Authorization
Once the government has incorporated your business, you cannot practice medicine through it until you receive a Certificate of Authorization from the CPSO. You must submit a detailed application form, a copy of your Articles of Incorporation, a corporate profile report, and a signed declaration stating that the corporation complies with all provincial regulations. You must renew this certificate annually.
How Much Does it Cost in Ontario?
Forming an MPC involves both mandatory government and regulatory fees, as well as highly recommended professional advisory fees.
- Provincial Incorporation Fee: The government fee to file your Articles of Incorporation online in Ontario is currently $300 CAD.
- CPSO Application Fee: The initial fee to obtain your Certificate of Authorization from the CPSO is $400 CAD. You will also pay an annual renewal fee of $175 CAD.
- Law Firm / Legal Fees: Hiring a corporate lawyer to draft the specific share clauses, resolutions, and minute books usually costs between $1,500 and $3,500 CAD.
- Accountant Fees: Engaging a CPA for tax planning and ensuring your new MPC is registered correctly with the Canada Revenue Agency (CRA) may add an additional $1,000 to $2,500 CAD.
How Long Does the Process Take?
⏱ Incorporating a medical practice in Canada takes a few weeks, primarily due to regulatory processing times.
- Provincial Incorporation: Filing the Articles online is almost instantaneous, usually taking 1 to 2 business days to receive your corporate documents.
- CPSO Processing: Once you submit your complete application to the College, it typically takes 2 to 4 weeks for them to review the documents and issue the Certificate of Authorization.
- CRA Registration: Setting up your corporate tax accounts and payroll with the CRA generally takes 1 to 3 weeks.
Comparison: Standard Corporation vs. Medicine Professional Corporation
| Feature | Standard Ontario Corporation | Medicine Professional Corporation (MPC) |
|---|---|---|
| Who Can Be a Director? | Anyone over 18 who is not bankrupt. | Must be a licensed physician in Ontario. |
| Voting Shareholders | Anyone, including other corporations. | Must be a member of the CPSO. |
| Malpractice Liability Protection | Shields owners from most personal liability. | Does not shield the doctor from professional medical negligence claims. |
Frequently Asked Questions (FAQ)
Can my spouse be a director of my MPC?
No. Under the Business Corporations Act and CPSO rules, only licensed physicians who are shareholders of the corporation can be officers or directors of a Medicine Professional Corporation. Your spouse can only hold non-voting shares.
Can two doctors form a single professional corporation together?
Yes, it is possible for multiple physicians to be voting shareholders in the same Medicine Professional Corporation, provided they are all members of the CPSO. However, most doctors choose to have their own separate MPCs to maintain individual control over their tax planning and retirement savings.
Do I need to change my billing with the Ministry of Health?
Yes. Once your MPC is authorized by the CPSO, you must notify the Ministry of Health to ensure that your OHIP billings are directed to the new corporate bank account rather than your personal account. Your law firm or accountant can generally assist with this transition.
Can my MPC invest in real estate or the stock market?
Generally, yes. An MPC is permitted to invest its surplus funds in passive investments like stocks, bonds, or real estate. However, the corporation cannot operate an entirely separate, unrelated active business (like running a restaurant) under the MPC structure.
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