Dental practice ownership rules in Prince Edward Island

Prince Edward Island regulates dentists through the PEI Dental College, and the rules for practising through a corporation come from the province’s Regulated Health Professions Act, which applies across the regulated health colleges. The College explains its own permit process on a short page called Corporations. Read side by side, the Act and the page set out the ownership tests in detail. This guide covers who may hold shares, how a permit is obtained and kept, and what a buyer or seller should ask. It is not legal advice, and the Act’s office consolidation is not the official version. Other provinces run their own regimes.

What the College requires

The College says any corporation set to provide dentistry services in the province, general or specialized, must be issued a permit by the College, and that the dentist applying is expected to be a registered member. It cites section 15 of the Regulated Health Professions Act as the source of the requirement for approval before a member practises as a corporation. The College also says approved corporate names must include the surname or surnames of one or more licensed dentists who are shareholders, and that certified specialists may add their specialty alongside the dentist’s name but not use the specialty alone. The permit is subject to annual renewal.

Who may hold voting shares

Section 15(2)(e) of the Act sets the test for each issued voting share, not a majority of them. Each share must be legally and beneficially owned by a member, by a trust in which all trustees and all beneficiaries are members, by a health profession corporation, or by a corporation whose voting shares are all owned by members or by such trusts and that meets the Act’s requirements for non-voting shares and for officers and directors. Section 15(2)(g) adds that all of the officers and directors of the corporation must be members. A member, in the Act’s terms, is an individual registered in a register of a regulated health profession. Section 15(2) is itself made subject to section 25, so read that section too. A buyer who plans to hold shares through a holding company should ask whether that company fits the Act’s description before the structure is fixed.

Non-voting shares and family

The Act treats non-voting shares more broadly. Under section 15(2)(f), each issued non-voting share may be owned by a member, by a health profession corporation that is a voting shareholder, by a spouse, child, grandchild, sibling or parent of a member who is a voting shareholder in the corporation or in a health profession corporation that is a voting shareholder in it, by a qualifying trust, or by a corporation owned and run by those persons. A person outside those categories is not named. That detail matters to a seller who wants to keep a stake for an adult child or sibling, and to a buyer assembling a family structure. It also matters for any investor who is not a member or a listed relative. Ask the College to confirm how it reads each category before the share structure goes into the agreement.

Review, conditions and keeping the permit

Under section 15(3), the registrar reviews an application and may add the corporation to the record and issue a permit if satisfied that the section 15(2) requirements are met. If the registrar is not satisfied, the application goes to the council, which may direct a permit and may impose terms and conditions on it. Section 15(7) requires a corporation that ceases to meet any eligibility requirement to notify the council without delay. Section 30(2) of the Regulated Health Professions Act requires notice to the registrar within thirty days of any change in the status of shareholders or directors. Section 19(5) makes a suspended or cancelled permit invalid, and section 25 allows the council to refuse or decline to renew a permit in specified circumstances. Under section 25(4) of the Regulated Health Professions Act the council may suspend or cancel the permit of a corporation that fails an eligibility requirement, but section 25(5) bars that for 90 days from the failure where the reason is that a shareholder has died or has otherwise ceased to be registered, and section 25(6) lets the council extend the period in writing when a member who is a shareholder dies. The practical lesson is to treat a change of ownership as a regulatory event, not only a corporate one.

Control, liability and the order of steps

Section 30(1) bars a shareholder from entering into a voting trust agreement, proxy or similar agreement that gives a non-member the authority to vote the shares. Section 28 says a member’s relationship to a health profession corporation does not affect, modify or diminish the application of the Act, or the member’s fiduciary, ethical and legal duties or liability, and that the corporation is jointly and severally liable with a member who practises on its behalf for fines, costs and expenses that member is ordered to pay under the Act. The College lists the order of steps for a new corporation: choose a compliant name, complete its application for a permit, submit it with the fee, then register the corporation under the PEI Business Corporations Act. For the financing side of a purchase, see financing a dental practice acquisition.

• Ask for the current permit and any terms or conditions the council has placed on it.
• Ask who legally and beneficially owns every voting share, and whether each holder falls within section 15(2)(e).
• Ask whether any non-voting shareholder falls outside the relatives and entities listed in section 15(2)(f).
• Ask whether any voting trust, proxy or similar agreement exists, given section 30(1).
• Plan the notice to the registrar that section 30(2) requires after any change in shareholders or directors.