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

Manitoba regulates corporate veterinary practice in Part 4.1 of The Veterinary Medical Act, C.C.S.M. c. V30. The Act defines a veterinary corporation as a corporation holding a valid permit, and, subject to section 17.4(5), the registrar of the Manitoba Veterinary Medical Association issues or renews that permit when satisfied of the conditions in section 17.4(1). A veterinary corporation may practise veterinary medicine only through one or more licensed members. For a buyer, the practical effect is that the company, its shareholders, its voting arrangements and its later notices all carry regulatory weight. This guide sets out those Manitoba rules only, and what to check on a share or asset purchase.

Who regulates veterinary practice in Manitoba

The Manitoba Veterinary Medical Association is the licensing body, and its website directs those who want to become a licensed veterinarian or registered veterinary technologist to its membership requirements. The Act speaks of licensed members, and it gives the registrar the power to issue a corporate permit. Under section 17.3, the council must establish and the registrar must maintain a record of veterinary corporations, and the information the Act lists for public access must be available at the Association’s office during normal business hours and on its website. A buyer can therefore look up what the record shows about the target company before an offer. Veterinary drugs sit under a federal regime: Health Canada’s Veterinary Drugs Directorate applies the Food and Drug Regulations under the Food and Drugs Act.

What the corporate permit requires

Under section 17.4(1), and subject to subsection (5), the registrar must issue a permit or a renewal to a corporation if satisfied of the conditions listed. They include that the corporation is incorporated, formed by amalgamation or continued under The Corporations Act and is in good standing under that Act, that its name includes the words “veterinary corporation”, that each voting share is legally and beneficially owned by a licensed member or a veterinary corporation, that each other share is owned by the persons section 17.4(1)(d) lists, and that each director and the president are licensed members. A permit may carry conditions, and it is valid for the period it states unless cancelled, surrendered or suspended. Subsection (5) also sets out when the registrar must refuse and when the registrar may refuse, so read it.

The name, the permit and carrying on business

Section 17.5(1) says a corporation whose name includes the words “veterinary corporation” must not carry on any business in the province unless it holds a valid permit. Section 17.2(1) separately limits what a veterinary corporation may do: it may practise veterinary medicine but only through one or more licensed members. If you are buying a company that operates under that name, confirm that the permit is valid and renewed. Ask also what the permit’s period is and whether the registrar attached conditions under section 17.4(2).

Voting agreements and indirect holders

Section 17.6(1) says an agreement or proxy that vests in a person who is not a licensed member the authority to exercise any voting right attached to a share of a veterinary corporation is void. The Act’s definition of voting shareholder also reaches beyond the name on the register: it covers a person who owns a voting share, or who is a voting shareholder of another corporation that owns a voting share. Section 17.6(2) adds that a unanimous shareholders’ agreement in respect of a veterinary corporation is void unless each shareholder is a licensed member or a veterinary corporation. A buyer financing the purchase through a lender, an investor or a holding company can ask a Manitoba lawyer whether each proposed voting arrangement fits section 17.6 before signing.

Notice of changes on a sale

Under section 17.7, a veterinary corporation must notify the registrar, within the time period and in the form and manner specified under the Association’s by-laws, of any change in the corporation’s directors, president or voting shareholders. A purchase of shares may change at least one of those, so find the by-law that sets the timing and the form before closing. On an asset purchase into a new company, the new company needs its own permit under section 17.4 if it will use the words “veterinary corporation”. Confirm with the registrar which route applies. The Manitoba Companies Office handles the incorporation and updating of a Manitoba corporation. The national guide to buying a veterinary clinic in Canada covers the general purchase steps.

What to ask the seller for

Ask for documents that show the permit position and the ownership chain. Current listings are collected under healthcare businesses for sale.

• The current veterinary corporation permit and its renewal history, including any conditions the registrar attached.
• The share register and the corporate records showing each voting shareholder and any corporation that owns a voting share.
• Every shareholder agreement, proxy and voting agreement, to test them against section 17.6.
• The list of licensed members through whom the corporation practises.
• Copies of past notices to the registrar of changes in directors, president or voting shareholders.