How to buy a veterinary clinic in Alberta: licences, ownership rules and what transfers

Alberta runs corporate veterinary practice through a permit. The Veterinary Profession Act defines a permit holder as a corporation that holds a permit, and, except as the Act otherwise provides, it bars anyone but a registered veterinarian or a permit holder from engaging in the practice of veterinary medicine. The Veterinary Profession General Regulation, Alta. Reg. 44/1986, then sets the conditions on which the Council approves a corporation for registration as a permit holder. The Alberta Veterinary Medical Association reviews the qualifications of veterinarians and veterinary technologists applying to practise in Alberta. This guide covers what those Alberta rules mean for a buyer, and why the structure of the buying company matters before closing.

Who regulates veterinary practice in Alberta

The Alberta Veterinary Medical Association describes its work as including review of the academic, personal and ethical qualifications of veterinarians and veterinary technologists applying for a licence to practise in Alberta. The Act’s part on registration of permit holders sits alongside its rules for registered veterinarians, and the General Regulation names the Council as the body that approves a corporation for registration as a permit holder. A buyer who is not a veterinarian can ask the Association and an Alberta lawyer how the permit conditions apply to their structure. Drug regulation is a federal layer on top: Health Canada’s Veterinary Drugs Directorate applies the Food and Drug Regulations under the Food and Drugs Act.

What a permit holder must satisfy

Section 11(1) of the Regulation says no corporation shall be approved for registration as a permit holder by the Council unless it provides evidence satisfactory to the Council that it meets the conditions listed there. They are that the corporation is registered under or established by an Act of Alberta and, subject to subsection (1.1), that an unrestricted veterinarian beneficially owns the portion of the issued voting shares that section 11(1)(b) sets. Beneficial ownership is a different thing from the name on a share register, so the section needs reading against how any holding company is set up. A buyer should read section 11 itself, and the definition of an unrestricted veterinarian, rather than rely on this summary.

The Council’s exception

Subsection 11(1.1) deals with a corporation that does not meet the share requirements in subsection (1). The Regulation allows the Council to approve such a corporation only if it does not offer veterinary services to the public, or practise for the benefit of individual members of the public, except in accordance with an authorization the Council gives under subsection (1.2). Do not assume a clinic serving the public falls inside it. If the buying company cannot meet the voting-share test, ask the Association and an Alberta lawyer whether subsections (1.1) and (1.2) could apply to your facts, and in what form the Council wants any request. Leave enough time in the closing schedule for an answer, because an approval that has not been given cannot be assumed.

Employing the veterinarians

The Regulation also sets conditions on who works for the permit holder. Under section 11(2), a permit holder shall employ one or more unrestricted veterinarians who shall be responsible for directly supervising its practice of veterinary medicine, and under section 11(3) it shall ensure that all veterinarians employed by it are registered veterinarians. For a buyer, that turns the clinic’s medical staff into part of the regulatory position. Ask who the unrestricted veterinarians are, whether they intend to stay after closing, and whether the clinic could meet these two conditions if one of them left on the closing date.

What transfers on a share sale and on an asset sale

The Regulation approves a corporation for registration as a permit holder, so ask whether that registration stays with the corporation you are buying or must be sought afresh. On a share purchase the corporation is the same, but the voting-share test is applied to its owners, so the ownership change itself needs checking against section 11 and with the Association. On an asset purchase into a new company, the new company is not yet a permit holder merely because the seller’s company was. Confirm the sequence in writing with the Association before closing. The national guide to buying a veterinary clinic in Canada covers the general purchase steps.

What to ask the seller for

Ask for records that prove the permit position and who stands behind it. Current listings are collected under healthcare businesses for sale.

• The clinic corporation’s permit holder registration, and the correspondence with the Association or the Council behind it.
• The share register and any records showing who beneficially owns the voting shares.
• Any approval given under section 11(1.1), with its terms, if the corporation relied on it.
• A list of the unrestricted veterinarians the clinic employs, and confirmation that every veterinarian it employs is registered.
• Any shareholder, trust or holding-company documents that affect who is the beneficial owner.