How to buy a dental practice in Manitoba: licences, ownership rules and what transfers

Buying a dental practice in Manitoba means working with the Manitoba Dental Association, the regulator of the province’s dentists, and with The Dental Association Act, which sets who may practise and who may own a dental corporation. The registrar of the Association issues the permit a dental corporation needs. Manitoba’s Regulated Health Professions Act contains transitional provisions that apply until The Dental Association Act is repealed, so confirm with the Association which Act governs at your closing. This guide covers the licensing rule, the permit, share ownership, voting agreements and notice, and what to ask the seller for. For the national picture, see buying a dental practice in Canada, and browse healthcare businesses for sale. This guide covers Manitoba only.

Who may practise dentistry in Manitoba

Under The Dental Association Act, s. 2(1.1), and subject to exceptions in s. 2(2) to (4), no person other than a licensed member or a dental corporation may practise or profess to practise dentistry in Manitoba for hire, gain or hope of reward. The Manitoba Dental Association says a dentist must be registered and licensed with it to practise in the province. Section 2(1.2) goes further: no member may practise dentistry, as employee, assistant, agent, partner, shareholder or otherwise, under the express or implied control of, or for the benefit, profit or advantage of, any person other than a licensed member or a dental corporation. A buyer who is not a licensed member should ask a lawyer how that rule applies before planning any ownership structure.

The dental corporation permit

Under s. 23.5(1) of The Dental Association Act, a corporation whose name contains the words “dental corporation” may not carry on any business in Manitoba unless it holds a valid permit. Subject to s. 23.3(2), s. 23.3(1) requires the registrar to issue or renew the permit if satisfied the listed requirements are met, including that the corporation is incorporated, formed by amalgamation or continued under The Corporations Act and in good standing, and that its name includes those words. The registrar must refuse a permit if not satisfied by proper evidence that the corporation is eligible, and may refuse in other cases listed in s. 23.3(2). A refused corporation may appeal to the board of the Association. Under s. 23.4, a permit is valid for the period specified in it, unless cancelled, surrendered or suspended. The Act defines a dental corporation as a corporation holding a valid permit, so if you buy assets into a new corporation, ask the registrar what that corporation needs before it practises.

Who may own shares, direct and lead the corporation

For a permit, s. 23.3(1) requires that each voting share be legally and beneficially owned by a licensed member or a dental corporation, that each director be a licensed member, and that the president be a licensed member. The Act separately lists who may own the other shares, including, in the Act’s words, a spouse, common-law partner or child, within the meaning of the Income Tax Act (Canada), of a voting shareholder. Read s. 23.3(1)(d) with your lawyer if anyone other than the buying dentist expects to hold shares. Section 23.3(1)(g) also requires each person through whom the corporation will practise dentistry to be a licensed member, or an employee acting under the effective supervision and control of such a licensed member.

Voting agreements that the Act voids

Section 23.6(1) says an agreement or proxy that gives a person who is not a licensed member the authority to exercise any voting right attached to a share of a dental corporation is void. Section 23.6(2) says a unanimous shareholders’ agreement within the meaning of subsection 140(2) of The Corporations Act, in respect of a dental corporation, is void unless each shareholder is a licensed member or a dental corporation. If a lender, investor or partner expects a voting right, a proxy or a shareholders’ agreement as part of the deal, have a lawyer test it against these two provisions before closing.

Notice to the registrar after a change

Section 23.7 requires every dental corporation to notify the registrar, within the time and in the form and manner prescribed by the board, of every change in its voting shareholders, other shareholders, directors and president. Under s. 23.9(1), and subject to the limits in s. 23.9(2), the board may cancel or suspend a permit in listed cases, and the list includes a corporation ceasing to meet a requirement of s. 23.3(1). Corporate filings are a separate step: the Manitoba Companies Office directs anyone incorporating or updating a Manitoba corporation to its forms and fees, while the s. 23.7 notice goes to the registrar. The Canada Revenue Agency says that if the business you are selling has employees, you must close your payroll account.

• The corporation’s current permit from the Association’s registrar, and its permit history
• The list of voting shareholders, other shareholders, directors and the president, with proof each licensed member is in good standing
• Any shareholders’ agreement, voting agreement or proxy, so a lawyer can check it against s. 23.6
• Copies of notices of change already given to the registrar under s. 23.7
• The deal structure in writing, so the Association can confirm whether a new permit is needed