How to buy a physiotherapy clinic in Prince Edward Island: licences, ownership rules and what transfers

Prince Edward Island regulates physiotherapy through the PEI College of Physiotherapy, which has a legislated mandate to regulate the practice in the public interest. The governing statute is the Regulated Health Professions Act, with the Physiotherapists Regulations made under it. For a buyer, the interesting part is how two provisions interact. The Act creates a permit for a health profession corporation and bars other corporations from carrying on a member’s business, and the Physiotherapists Regulations carve out an exception for physiotherapy. This guide reads those provisions in order, then lists what to ask the seller and the College. For the national picture, see buying a physiotherapy clinic in Canada.

The regulator and the statute

The College describes itself as a not-for-profit organization with a legislated mandate to regulate the practice of physiotherapy in the public interest. Its statute is the Regulated Health Professions Act, which covers several health professions in one Act, so a physiotherapy buyer reads the general provisions and the Physiotherapists Regulations together. Ask the seller for every permit, registration and certificate in the Act’s terms, and ask which document each one is.

The health profession corporation permit

Section 15 of the Act lets a corporation apply to the registrar for a permit to operate as a health profession corporation. Under section 15(2), and subject to section 25, the applicant is eligible if, among other conditions, it is in good standing under the legislation under which it was incorporated and its letters patent or articles permit it to carry on the practice of a regulated health profession. Its name must meet the regulations. The registrar reviews the application and must refer it to the council if not satisfied that the applicant meets the requirements. A seller whose clinic operates through such a corporation should be able to produce the permit and the terms and conditions, if any, that the council attached to it.

Who may own the shares, and who may direct and practise

Under section 15(2)(e), each issued voting share must be legally and beneficially owned by a member, by a trust in which all the trustees and all the beneficiaries are members, by a health profession corporation, or by a corporation meeting two further conditions in the Act. Section 15(2)(f) separately lists who may own non-voting shares, including certain family members of a member who is a voting shareholder. Under section 15(2)(g), all officers and directors must be members, and under section 15(2)(h) the persons who practise on the corporation’s behalf must be members with valid certificates of registration. Read the clauses in full. A summary will miss the conditions inside them.

The regulation exception for other corporations

Section 90(1) of the Act says that, except where otherwise provided in the regulations, no corporation other than a health profession corporation shall carry on the business of providing the professional services of a member. Section 20.1 of the Physiotherapists Regulations provides that this prohibition does not apply to a corporation other than a health profession corporation carrying on the business of providing the professional services of a physiotherapist or a physiotherapist resident. The exception removes one prohibition, and it does not say that no other rule applies. Ask the College what, if anything, it expects from a corporation that relies on section 20.1 rather than holding a permit.

Notice, expiry and names

Section 15(7) requires a health profession corporation that ceases to meet any eligibility requirement for its permit to notify the council without delay. Under section 23, and subject to its extension rule, a permit expires on the expiry date shown on it, and on written request the council may extend the permit beyond that date for a period not exceeding 30 days. The regulations require the name of a corporation applying for a permit to be, in the registrar’s opinion, in good taste, dignified and professional, and a health profession corporation must get the registrar’s written confirmation before it changes its name. A rebranding plan belongs on the closing timeline.

Share purchase or asset purchase

A purchase of shares in a permit-holding corporation puts section 15(2)(e) to (h) and section 15(7) in play on the day of closing. A purchase of assets into a different corporation raises the question of whether that corporation needs its own permit or relies on section 20.1. The College also publishes a Private Practices page listing clinics with their owners and operators, so ask the College how that listing will be updated after a sale. See healthcare businesses for sale for current listings.

• The seller corporation’s permit, with any terms and conditions, or the basis on which it relies on section 20.1.
• The share register, checked against section 15(2)(e) and (f), and the list of officers and directors.
• The names and certificates of registration of every physiotherapist practising on the corporation’s behalf.
• The College’s written confirmation of how the clinic’s entry on its Private Practices page will change.
• Written confirmation from the registrar of any new corporate name before it is used.