How do I sell a physiotherapy clinic in Ontario?

To sell a physiotherapy clinic in Ontario you first have to know who is allowed to own it. If the clinic runs through a physiotherapy professional corporation, that corporation is a regulated entity, and the College of Physiotherapists of Ontario explains who can hold its shares. That narrows the field of buyers before price or terms come up. The second question is the patient records, which the Personal Health Information Protection Act, 2004 treats as health information held by a custodian. This guide follows those two constraints, and then the practical steps that depend on them. It does not cover how to price the clinic or how to structure the tax side of the sale.

What the corporation is, and who can own it

The Regulated Health Professions Act, 1991 defines a health profession corporation as a corporation incorporated under the Business Corporations Act that holds a valid certificate of authorization issued under the Regulated Health Professions Act, 1991 or the Code. The College says that to form one, a physiotherapist first incorporates with the Ontario ministry and then applies to the College for a certificate of authorization. It states that only members of the same profession can be shareholders, officers or directors, so for a physiotherapy corporation they must all be physiotherapists. A buyer who is not a physiotherapist cannot take shares in it. The College contrasts this with a practice management corporation, which some physiotherapists use to lease clinic space, buy equipment or pay administrative employees: it is not permitted to practise physiotherapy, and its ownership rules are more relaxed.

Why a buyer’s status matters to the sale structure

The Act also says no corporation shall hold itself out as a health profession corporation unless it holds a valid certificate of authorization, and no person shall hold themselves out as a shareholder, officer, director, agent or employee of one unless the corporation holds a valid certificate. The Act makes contravening either rule an offence. If a sale could leave an ineligible shareholder in place, even for a short period, ask the College how that affects the certificate. If a buyer proposes to hold shares through anything other than their own eligible corporation, ask the College whether it is permitted before you agree.

The College’s certificate belongs to the corporation

The College says all professional corporations are legally required to have a certificate of authorization issued by the College in order to practise, and that the certificate must be renewed annually. So, before listing, confirm your own certificate is current and in good standing, and fix any lapse before you sign. If your clinic operates through more than one entity, ask which of them holds a certificate and which does not.

Corporation and clinicians are separate things

The College points out that a professional corporation is a different legal entity from the individual physiotherapists who own it, which is why it charges the corporation a separate fee. The same distinction matters in a sale. The corporation holds the certificate, while each physiotherapist working in the clinic holds a personal registration. A buyer taking over the corporation does not thereby take over anyone’s registration, and the Physiotherapy Act, 1991 restricts the title physiotherapist to members of the College. Ask the buyer how they will staff the clinic, and make sure your treating clinicians know what the sale means for them.

Mind the renewal calendar

Two renewals can fall near a closing. The corporation’s certificate must be renewed annually, and the College says annual renewal of individual registration runs in February and March and must be completed each year to maintain registration. Neither is a reason to delay a sale, but a lapse in either would be awkward to explain to a buyer. Write down both dates, and say in the agreement who is responsible for each between signing and closing.

Sharing patient records with a buyer

Under section 42 of PHIPA, a health information custodian may disclose personal health information about an individual to a potential successor, for the purpose of allowing the potential successor to assess and evaluate the operations of the custodian, if the successor first enters into an agreement with the custodian to keep the information confidential and secure and not to retain any of it longer than is necessary for the assessment or evaluation. The same section lets a custodian transfer records to its successor if it makes reasonable efforts to give the individual notice before the transfer or, if that is not reasonably possible, as soon as possible after it. Put a confidentiality agreement in place before due diligence opens.

Steps to take before you list the clinic

• Check that the corporation’s certificate of authorization is valid and renewed, and that every shareholder, officer and director is a physiotherapist.
• Ask each prospective buyer how they will hold shares, and send that question to the College if the answer is unclear.
• Sign the confidentiality agreement PHIPA contemplates before showing any patient information, and limit what you show to what is reasonably necessary for the buyer’s assessment, as PHIPA requires of custodians.
• Plan how and when patients will be told that their records are moving, as PHIPA’s notice requirement runs before the transfer or as soon as possible after it.
• Review leases and equipment contracts for consent requirements, since those sit outside the College’s rules.