A professional corporation in Ontario is a corporation incorporated or continued under the Ontario Business Corporations Act (OBCA) that holds a valid certificate of authorization from the body that governs a profession. Sections 3.1 to 3.4 of the OBCA set the rules: only professions whose governing Act permits it can practise through one, the shares must be owned by members of the profession (with a family exception for physicians and dentists), the name must include the words "Professional Corporation", and the corporation does not limit a professional's personal liability for professional negligence. This guide explains each of those rules, which professions qualify, how the process works, and where tax fits in.
Outside Ontario, every province has its own version of these rules, set by its corporate statute and its regulators. This guide focuses on Ontario, because that is where the question is most often asked and where the statute is most detailed.
What a professional corporation is
Section 3.1 of the OBCA defines a professional corporation as a corporation incorporated or continued under the OBCA that holds a valid certificate of authorization or other authorizing document issued under an Act governing a profession. Both halves matter. A corporation becomes a professional corporation only once it has been incorporated in Ontario and its governing body has authorized it to practise.
Section 3.2 then says the OBCA and its regulations apply to a professional corporation, except where sections 3.1 to 3.4 and the regulations provide otherwise. In practice, a professional corporation is an ordinary Ontario business corporation with an extra layer of conditions on top. It has directors, officers and shareholders, a registered office, by-laws, a minute book and annual filing obligations, just like any other Ontario corporation. What differs is who can own it, what it can do, what it can be called, and who supervises it.
The profession stays regulated even when it is practised through a corporation. For health professions, the Health Professions Procedural Code (Schedule 2 to the Regulated Health Professions Act, 1991) states that a member's professional, fiduciary and ethical obligations to patients are not diminished by practising through a health profession corporation, and that they apply equally to the corporation and its directors, officers, shareholders, agents and employees.
Which Ontario professions can incorporate
Under section 3.1(2) of the OBCA, a professional corporation may practise a profession governed by an Act if that Act expressly permits practice by a corporation, or if the profession is governed by one of the Acts listed in the OBCA itself, or by an Act prescribed by regulation. The listed Acts are:
| Profession | Governing Act named in OBCA s. 3.1(2) | Governing body |
|---|---|---|
| The 26 regulated health professions, including medicine, dentistry, nursing, pharmacy, optometry, chiropractic, physiotherapy, psychology and massage therapy | Any Act named in Schedule 1 of the Regulated Health Professions Act, 1991 | The college for that profession, for example the College of Physicians and Surgeons of Ontario (CPSO) or the Royal College of Dental Surgeons of Ontario (RCDSO) |
| Chartered professional accountants | Chartered Professional Accountants of Ontario Act, 2017 | CPA Ontario |
| Lawyers and paralegals | Law Society Act | Law Society of Ontario |
| Social workers and social service workers | Social Work and Social Service Work Act, 1998 | Ontario College of Social Workers and Social Service Workers |
| Veterinarians | Veterinarians Act | College of Veterinarians of Ontario |
The Law Society Act allows a professional corporation for lawyers, one for paralegals (persons licensed to provide legal services), and one owned jointly by lawyers and paralegals. The Health Professions Procedural Code allows one or more members of the same health profession to establish a health profession corporation, subject to the regulations and the college's by-laws. A 2024 amendment will replace the Veterinarians Act in the OBCA list with the Veterinary Professionals Act, 2024, but that change was not yet in force on the current e-Laws consolidation.
Not every regulated profession uses this structure. Professional engineering, for example, is not on the OBCA list. Under the Professional Engineers Act, a business that offers engineering services to the public needs a certificate of authorization from Professional Engineers Ontario, which can be issued to an individual, a partnership or a corporation. That is a separate regime set by that Act. For any profession, the governing body, not the corporate registry, is the authority on whether and how its members can practise through a corporation.
How it differs from a regular corporation
Section 3.2(2) of the OBCA sets five conditions that every professional corporation must meet, subject to the special health profession rules discussed below:
- Ownership. All issued shares must be legally and beneficially owned, directly or indirectly, by one or more members of the same profession.
- Directors and officers. All officers and directors must be shareholders of the corporation.
- Name. The name must include the words "Professional Corporation" or "société professionnelle" and must follow both the OBCA name rules and the governing body's name rules.
- No number name. A professional corporation cannot be a numbered company.
- Restricted business. The articles must provide that the corporation may not carry on any business other than the practice of the profession. Activities related or ancillary to the practice, including investing surplus funds earned by the corporation, are still permitted.
The OBCA adds further safeguards. A voting agreement or proxy that gives a non-shareholder the right to vote a professional corporation's shares is void, and a unanimous shareholder agreement is void unless every shareholder is a member of the profession. A professional corporation also cannot simply lose its status because something happens to a shareholder: under section 3.3, its certificate stays valid despite the death or divorce of a shareholder, the bankruptcy or insolvency of the corporation, or the suspension of the certificate. It ceases to be a professional corporation when the certificate is revoked, and it must then change its name to remove the word "professional".
Name requirements
Because a professional corporation cannot have a number name, it always needs a word name, and a named Ontario corporation needs an Ontario-biased NUANS name search report dated within 90 days of filing the articles. The OBCA requirement is only the starting point. Each governing body sets its own name format, and some are strict. The CPSO, for example, requires a physician corporation's name to follow a fixed format, such as "Smith Medicine Professional Corporation", using the physician's surname as it appears on the College's register, with no additional words or characters.
Because of these rules, the proposed name is usually checked against the governing body's requirements before the articles are filed. A name that the corporate registry accepts can still fall short of the governing body's format, and correcting it after incorporation means filing Articles of Amendment. For more on how the search itself works, see our guide to NUANS name searches.
Share ownership and the family exception
The general rule is that only members of the profession can own shares. Lawyers and paralegals follow the Law Society Act version of that rule: shares of a law corporation must be owned by persons licensed to practise law in Ontario, shares of a paralegal corporation by persons licensed to provide legal services, and shares of a combined corporation by persons holding either licence.
Physicians and dentists have a specific exception. Ontario Regulation 665/05 (Health Profession Corporations) changes the rules for physician corporations and dentist corporations as follows:
- Every voting share must be owned, directly or indirectly, by a member of the CPSO (for physicians) or the RCDSO (for dentists).
- Non-voting shares may be owned by a member of the college, by a family member of a voting physician or dentist shareholder, or by trustees in trust for that shareholder's minor children.
- A family member means the shareholder's spouse, child or parent, as defined in the regulation.
- All directors and officers must be shareholders who are members of the college, so family members cannot sit on the board.
Outside those two professions, family members generally cannot hold shares of an Ontario professional corporation under the OBCA rules. Who can own shares has tax consequences as well as regulatory ones, so share structures are usually designed with an accountant or lawyer. Any later change of shareholders also has to be reported. The CPSO, for example, requires notice of changes in shareholders who are members of the College within 15 days.
The big misconception about liability
People assume a professional corporation shields them from malpractice claims the way a regular corporation shields owners from business debts. It does not. Section 3.4 of the OBCA is explicit. The usual rule that shareholders are not liable for the corporation's obligations does not limit a shareholder's professional liability under the Act governing the profession, for the shareholder's own acts or for the acts of the corporation's employees or agents. The liability of a member for a professional liability claim is not affected by practising through a professional corporation.
Section 3.4 goes further. Shareholders are jointly and severally liable with the corporation for professional liability claims arising from errors and omissions made while they were shareholders, although no more than they would have been without the corporation. If a professional corporation is a partner in a partnership or limited liability partnership, its shareholders have the same liability as if they were the partners themselves.
Why federal incorporation is not used
Many businesses can choose between federal incorporation under the Canada Business Corporations Act (CBCA) and provincial incorporation, as explained in our guide to federal vs provincial incorporation. For an Ontario professional corporation, that choice does not exist in the usual way. The OBCA definition requires the corporation to be incorporated or continued under the OBCA, and the Regulated Health Professions Act, 1991 defines a health profession corporation as a corporation incorporated under the Business Corporations Act. The CPSO states directly that corporations incorporated outside Ontario, including federal CBCA corporations, cannot obtain its certificate of authorization.
An existing federal corporation is not necessarily a dead end. The OBCA definition covers corporations "continued" under the OBCA, so a federal corporation can move to Ontario through a continuance and then meet the professional corporation conditions. Whether that makes sense depends on what the corporation already holds and does.
How to set up a professional corporation in Ontario
The exact process depends on the governing body, but the order of steps is broadly the same. The corporation is incorporated first under the OBCA, and the governing body's certificate of authorization follows.
| Step | What happens | Who is involved |
|---|---|---|
| 1. Confirm eligibility | Confirm that the profession can practise through a corporation and review the governing body's requirements for the name, the articles and the application. | Governing body |
| 2. Choose and search the name | Pick a name that includes "Professional Corporation" in the governing body's format, and obtain an Ontario-biased NUANS report dated within 90 days of filing. | Incorporator, NUANS search house |
| 3. Prepare the articles | Draft Articles of Incorporation with the professional corporation name, a share structure that respects the ownership rules, and the clause restricting the business to the practice of the profession. | Incorporator, often with a lawyer |
| 4. File with Ontario | File the Articles of Incorporation under the OBCA. The government fee is $300. | Ontario Business Registry |
| 5. Apply for the certificate | Apply to the governing body for a certificate of authorization, following its application process and paying its fee. | Governing body |
| 6. Organize the corporation | Adopt by-laws, issue shares only to eligible holders, appoint directors and officers who meet the rules, and set up the minute book. | Directors and shareholders |
| 7. Initial filings | File the Ontario Initial Return within 60 days of incorporation (no government fee) and register with the CRA for a Business Number and any tax accounts needed. | Corporation |
After that, the corporation has two sets of ongoing obligations. On the corporate side, it files the Ontario Initial Return once and then an annual return every year, keeps its minute book current and reports changes of directors or address. On the professional side, it keeps its certificate of authorization valid. The CPSO, for example, requires its certificate to be renewed every year. For the general Ontario incorporation process that sits underneath all of this, see our guide to incorporating in Ontario.
Why professionals still incorporate: the tax side
The main draw is usually tax. A professional corporation that is a Canadian-controlled private corporation can generally claim the small business deduction on its active business income. In 2026, that brings the federal rate down from 15 percent to 9 percent on the first $500,000 of active business income, a limit shared among associated corporations. Provincial tax is added on top. Our guide to corporate tax rates in Canada sets out the combined rates and the rules that reduce the $500,000 limit.
The benefit comes from the gap between those corporate rates and the top personal rates. Income left in the corporation is taxed at the corporate rate, and personal tax applies only when the money comes out as salary or dividends, which is why the corporation's ability to invest surplus funds matters. Many professionals compare the options covered in our guide to salary vs dividends.
Incorporation is not automatically a tax saving. Professionals who need all their income to live on gain little from deferral, and the income tax rules that limit income splitting with family members apply to professional corporations too, which affects the family share structures allowed for physicians and dentists. The right answer depends on income, family situation and the profession's rules, which is a conversation for an accountant who works with professionals in that field.
Where Korporex fits
Korporex's online incorporation filing service handles professional corporations the same way as any other incorporation: you complete the online application and Korporex prepares and files the articles. The certificate of authorization from your governing body remains a separate, profession-specific step, and its rules are set by the regulator, not by Korporex. Korporex can provide the Ontario-biased NUANS report that a professional corporation's name requires. Korporex is not a law firm, and this guide is general information, not legal or tax advice.
Frequently asked questions
What is a professional corporation in Ontario?+
It is a corporation incorporated or continued under the Ontario Business Corporations Act that holds a valid certificate of authorization from the body governing a profession, such as the CPSO or the Law Society of Ontario. It works like a regular Ontario corporation but must meet extra conditions on ownership, directors, its name and the business it can carry on.
Does a professional corporation protect me from malpractice claims?+
No. Section 3.4 of the OBCA states that practising through a professional corporation does not affect a member's liability for professional liability claims. Shareholders are also jointly and severally liable with the corporation for claims arising while they were shareholders. The corporation can still separate ordinary business obligations from the owner, unless the owner has personally guaranteed them.
Can my spouse or children own shares of my professional corporation?+
Only in specific cases. Under Ontario Regulation 665/05, family members (spouse, child or parent) of a voting shareholder can own non-voting shares of a physician or dentist corporation, and trustees can hold non-voting shares for minor children. For other professions, the OBCA generally requires all shares to be owned by members of the profession. Tax rules on income splitting also apply.
Can I incorporate a professional corporation federally?+
Not for an Ontario professional corporation. The OBCA defines a professional corporation as one incorporated or continued under the OBCA, and the CPSO states that federal CBCA corporations cannot obtain its certificate of authorization. An existing federal corporation can be continued into Ontario and then meet the professional corporation requirements.
What name does a professional corporation need?+
The name must include "Professional Corporation" or "société professionnelle", cannot be a number name, and must follow the governing body's format. The CPSO, for example, requires a format like "Smith Medicine Professional Corporation" with no additional words. Because it is a named Ontario corporation, an Ontario-biased NUANS report dated within 90 days of filing is required.