To incorporate a dental practice in Ontario, you must legally form a Dentistry Professional Corporation (DPC) that strictly complies with the Royal College of Dental Surgeons of Ontario (RCDSO) rules. Only a licensed dentist can own the voting shares, the corporation’s name must follow exact legal conventions, and you must obtain a Certificate of Authorization, which carries an initial RCDSO fee of $750 CAD.
Building a successful dental practice in Ontario requires immense clinical skill, but structuring the business correctly is equally vital for long-term financial health. Whether you are launching a brand new family clinic in London, buying an established cosmetic dentistry practice in Markham, or expanding operations in Sudbury, incorporating your practice offers profound tax advantages. Through incorporation, a dentist can access the highly favourable Canadian small business tax rate and potentially split income with family members through strategic dividends.
However, dentists are deeply heavily regulated professionals. You cannot simply log onto the internet and register a standard business. 📋 You must carefully create a specialized entity known as a Dentistry Professional Corporation (DPC) under the strict guidelines of the Ontario Business Corporations Act (OBCA) and the Regulated Health Professions Act. Failing to structure your share classes correctly or naming the corporation improperly will result in the RCDSO outright rejecting your application. This guide deeply explains the exact step-by-step framework to properly establish a compliant dental corporation.
Step-by-Step Process in Ontario
Incorporating a dental practice requires flawless coordination between your corporate lawyer, your accountant, and the provincial regulatory college. Ensuring each step is performed in the precise legal sequence will powerfully prevent costly delays in opening your clinic doors.
Step 1: Incorporate the Professional Corporation (OBCA)
The very first step is to formally incorporate the business through the Ontario Business Registry. 🏲 This requires strictly drafting specific Articles of Incorporation. Unlike a standard retail business, the Articles for a DPC must contain highly specific legal clauses actively restricting the business strictly to the “practice of dentistry and activities related to or strictly ancillary to the practice of dentistry.” Any attempt to legally use the corporation to run a side business, like a real estate holding company, strictly violates Ontario law.
Step 2: Follow the Strict RCDSO Naming Conventions
The RCDSO rigorously dictates exactly what you can name your corporation. Your corporate name absolutely must include the full legal name (or standard recognized surname) of the dentist as it officially appears on the RCDSO register. It must also explicitly end with the precise phrase “Dentistry Professional Corporation” or “corporation professionnelle de dentisterie”. For example, “Dr. Jane Doe Dentistry Professional Corporation” is perfectly legal, but a catchy marketing name like “Bright Smiles Dental Inc.” is completely legally prohibited for the actual corporate name.
Step 3: Structure the Voting and Non-Voting Shares
Structuring the share classes is the most financially critical step. 💰 Under Ontario law, 100% of all voting shares must be legally and beneficially owned directly by a dentist licensed to practice in Ontario. However, the law brilliantly allows non-voting shares to be owned by family members, specifically defined as the dentist’s spouse, children, or parents. Proper share structuring allows the dentist to legally pay dividends to family members, maximizing tax efficiency.
Step 4: Apply for the RCDSO Certificate of Authorization
Once the corporation is legally formed, it cannot actually practice dentistry until it formally receives a Certificate of Authorization from the RCDSO. Your lawyer will actively submit a comprehensive application package to the College. This package heavily includes a legally certified copy of the Articles of Incorporation, a detailed corporate profile report, and a specific statutory declaration formally sworn by the dentist confirming total compliance with all regulatory rules.
How Much Does it Cost in Ontario?
Establishing a Dentistry Professional Corporation carries higher initial setup fees than a standard small business due to the necessary regulatory filings and the high level of legal customization required.
- Ontario Government Incorporation Fee: The base provincial filing fee to legally incorporate via the Ontario Business Registry is $300 CAD.
- RCDSO Initial Application Fee: The College strictly charges a non-refundable $750 CAD fee to meticulously process your Certificate of Authorization.
- Lawyer and Accountant Fees: A specialized Ontario dental lawyer typically charges between $1,500 and $3,500 CAD to properly draft the complex share structures, handle the College application, and carefully organize the corporate minute book.
- Annual Renewal Fees: You must legally renew your RCDSO Certificate of Authorization every single year, which currently costs an annual fee of exactly $175 CAD.
How Long Does the Process Take?
The timeline for setting up a DPC is slightly longer due to College processing times. 🕖 While the actual provincial incorporation step takes merely 1 to 2 days, drafting the specialized share structures typically takes your legal team 1 to 2 weeks. Once the comprehensive package is formally submitted to the RCDSO, the College usually takes approximately 2 to 4 weeks to deeply review the documents and officially issue the Certificate of Authorization. Therefore, you should plan for a total timeline of 4 to 6 weeks from start to finish.
Understanding Share Ownership Rules
To avoid massive regulatory headaches, you must strictly understand exactly who is legally allowed to own pieces of your DPC.
| Type of Individual | Can They Own Voting Shares? | Can They Own Non-Voting Shares? |
|---|---|---|
| Licensed Ontario Dentist | Yes, Mandatory | Yes |
| Spouse of the Dentist | Absolutely Not | Yes, Highly Common |
| Children or Parents | Absolutely Not | Yes (Directly or via Trust) |
| Unlicensed Office Manager | Absolutely Not | Absolutely Not |
Frequently Asked Questions (FAQ)
Does incorporating perfectly protect me from dental malpractice lawsuits?
No, absolutely not. In Ontario, a Dentistry Professional Corporation does not somehow legally shield you from professional liability. If you commit clinical malpractice, you remain entirely personally liable for your actions. However, the corporate structure may effectively protect your personal home and assets from standard commercial liabilities, such as breaking an office lease or a slip-and-fall in the clinic waiting room.
Can multiple dentists own the exact same professional corporation?
Yes. Two or more RCDSO-licensed dentists can legally co-own a single Dentistry Professional Corporation. In these complex scenarios, the voting shares are actively divided between the practicing partners, but it requires an incredibly robust, deeply detailed Shareholders’ Agreement to properly manage future retirements or sudden partnership disputes.
Can my professional corporation actively invest in the stock market?
Yes. While your DPC can only operate a dental practice as its core business, Ontario law generally permits the corporation to heavily invest its surplus cash into passive investments. This legally includes buying GICs, mutual funds, publicly traded stocks, or even holding commercial real estate strictly used for the dental practice itself.
What happens if I forget to renew my Certificate of Authorization?
If you fail to successfully renew the certificate by the strict annual August 31st deadline, your official authorization will be legally revoked by the RCDSO. Practising dentistry through a corporation without a valid certificate is an incredibly severe regulatory offence and can result in professional discipline and severe tax consequences from the CRA.
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