Dental practice ownership rules in Nova Scotia

Nova Scotia allows the incorporation of dental practices under conditions set by its dental regulator, and the conditions sit in a short regulation rather than in a long statute. For a buyer or seller, that regulation turns the corporation into a permit holder: the company can practise because a permit has been issued, and the permit can be lost if the company stops meeting the conditions. This guide reads the Nova Scotia Regulator of Dentistry and Dental Assisting’s professional corporations page and the text of Regulation 5 that it posts. The regulator’s page says it is due to be updated to align with the Regulated Health Professions Act, so treat the details as a starting point to confirm.

The permit is what allows the corporation to practise

Regulation 5 says a corporation may engage in the practice of dentistry upon being issued a permit, and that an application is made to the Registrar. The Registrar may issue a permit to a corporation that files the prescribed application, pays the prescribed fee, provides a certificate of incorporation and satisfies the Registrar on the other conditions in section 4. A permit is valid for the licensing year in which it is issued. It may be renewed on application, if the Registrar is satisfied that the corporation continues to meet the section 4 conditions. The regulator’s page says approval is required before a member may practise as a corporation, so ask whether the corporation you are buying already holds a permit and what a change of owners requires.

The ownership and management tests

Two of the section 4 conditions concern ownership and control. The Registrar must be satisfied that the majority of the voting shares of the corporation are beneficially owned by one or more licensed dentists. The Registrar must also be satisfied that the majority of the directors and officers are licensed dentists. The test is a majority in each case. The regulation text read for this guide does not say who may hold the remaining voting shares or fill the remaining seats, so a structure that depends on a non-dentist holding anything should be put to the Registrar in writing. Do not assume that silence in the text means permission.

Two corporate statutes in the sources

The sources do not line up neatly on the corporate side. The regulation refers to a certificate of incorporation under the Companies Act and asks the Registrar to be satisfied that the company is in good standing under both the Companies Act and the Corporations Registration Act. The regulator’s page, by contrast, says incorporation is under the Business Corporations Act and tells applicants to make application for corporate registration with the Registry of Joint Stocks. The Province runs that registry’s online service, called RJSC Connect. The regulation is an unofficial printed copy, and the page says it will be updated. Ask the regulator which statute and which certificate it expects today, and have your lawyer confirm the corporate filing before you plan a closing date.

After the permit is issued

Where there is any change in the shareholdings, directors or officers of a corporation that holds a permit, section 10 of Regulation 5 requires the president to give the Registrar written notice within fifteen days of the change. Section 11 requires the corporation to satisfy the Registrar before it changes its name or operates under another business name. Under the regulator’s page, approved names contain only the surnames, or surnames with given names or initials, of one or more licensed dentists who are shareholders, and certified specialists may add their specialty. Section 8 of Regulation 5 allows the Registrar to cancel a permit on fifteen days’ written notice where the corporation fails to meet a section 4 condition, and section 14 lets the Board review any decision or action of the Registrar. Section 9 requires the permit to be displayed at the premises.

Staff and advertising

Regulation 5 says a person entitled to practise dental hygiene, or dental assisting, may do so in the employ of a corporation that holds a permit. It also says the Board’s advertising standards regulation applies to any permit-holding corporation. For a buyer, that is a reason to ask whether the clinic’s advertising has been checked against those standards at the corporation level, not only at the level of the individual dentist. Ask the seller for the permit, its renewal history and any correspondence with the Registrar, and read them alongside the dental practice buyer checklist.

• Ask for the current permit and the most recent renewal, and confirm the licensing year it covers.
• Ask who beneficially owns every voting share, and who holds each director and officer seat.
• Ask the regulator which corporate statute and certificate it expects, given that its page and the regulation name different ones.
• Ask whether a sale of shares needs the Registrar’s approval beforehand or only the written notice within fifteen days that section 10 of Regulation 5 requires.
• Ask whether the regulator’s planned update will change any of the conditions that apply to your closing.