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

Veterinary medicine in Nova Scotia is governed by the Veterinary Medical Act and the Veterinary Medical Regulations made under it. The Regulations give decisions to the Registrar, the Council and an Accreditation Committee, and the Nova Scotia Veterinary Medical Association (NSVMA) publishes guidance on operating a practice. Two features matter for a buyer. The Regulations define a corporate permit as the permit that allows a corporation to carry on the practice of veterinary medicine in the province, and an accredited facility as one that holds a current accreditation certificate or an interim accreditation certificate. Both are affected when ownership changes. This guide walks through each, using the Regulations as published by the province and the NSVMA’s own guidance. Read none of it as applying outside Nova Scotia. For the national picture, start with buying a veterinary clinic in Canada.

The corporate permit

Under Nova Scotia’s Veterinary Medical Regulations, a corporation may apply to the Registrar for a corporate permit. With the application and the prescribed fee, the corporation provides the information the Registrar requires to establish that it is in good standing, that its names are fit and proper for a corporation engaged in the practice of veterinary medicine, that it meets the shareholding requirements of the Act, that a majority of its directors and officers hold general practice licences, and that each person who will practise veterinary medicine for and on behalf of the corporation holds a general practice licence. The permit is valid for the calendar year in which it is issued and may be renewed on or before its expiry date. If it appears to Council that a permit holder fails to meet those requirements, the Regulations say Council must notify it in writing of the specific requirements it failed to meet and suspend, revoke or refuse to renew the permit. Under s.25, a corporation must also notify the Registrar in writing within 15 days of any change to its voting shareholders, officers, directors or the persons who practise veterinary medicine for and on behalf of it. A buyer using a corporation to purchase a clinic should treat the permit as something to obtain, not assume.

Facility accreditation

The second layer is the facility. The Regulations provide for an accreditation certificate for a facility and, before a full certificate, an interim accreditation certificate after an inspection. The NSVMA tells people opening a practice to apply for a corporate permit and to request a hospital inspection, and says that inspection must be done before the doors are open to the public. The certificate is issued to the facility, and s.67, below, deals with what happens to it when ownership changes. Ask the seller for the current certificate and the category of facility it covers, and read the by-laws the Regulations point to for the standards that category must meet.

What happens when the majority of owners changes

This is the provision that matters most on a sale. Under s.67 of the Regulations, if the majority of the owners of a facility changes during the term of an accreditation certificate, or the majority of the voting shareholders of a corporate owner of a facility changes, the member or members who intend to practise in the facility after the change must notify the Registrar of the change in majority ownership and reapply for an interim accreditation certificate under s.57 within 30 days of the change. Under s.67(2), the earlier certificate stays in effect until an interim certificate is issued or denied. Section 62(2) separately lists events on which a certificate expires, and one of them is 30 days from a change in the majority of the owners, unless the members operating in or from the facility have given notice of the change under s.67. Read the two sections together with your lawyer.

Share purchase compared with asset purchase

The regulation speaks of a change in the majority of the owners and of the voting shareholders of a corporate owner, so it can reach both a sale of the facility itself and a sale of shares in a company that owns it, where the sale changes that majority. Do not assume that choosing one structure avoids the notice. The Regulations say the Registrar must issue a corporate permit to a corporation that meets the requirements, so the permit belongs to a corporation, not to a building. If the buyer is a new corporation, ask the Registrar what is needed for that corporation before closing. Whether it is necessary to restructure to meet the shareholding requirements of the Act is a legal question for a Nova Scotia lawyer.

Federal licences and general due diligence

Licences are not only provincial. Health Canada runs a dealer’s licence for controlled drugs and substances for veterinary use only, and publishes guidance on the fees that apply. Ask whether the clinic holds one, who the holder is and what happens to it on a sale. BDC’s due-diligence guidance lists licences and permits among the legal issues to review. In this sector, those include the corporate permit, the facility accreditation certificate and each practitioner’s general practice licence.

What to ask the seller for

• The current corporate permit, if a corporation operates the clinic, and its renewal history
• The facility’s accreditation certificate, any interim certificate and the most recent inspection report
• Proof that each veterinarian who will practise after closing holds a general practice licence from the NSVMA
• A list of the owners and, for a corporate owner, its voting shareholders, so you can see whether the sale changes the majority
• Any Health Canada dealer’s licence for veterinary use, with the name of the holder

If you want to see what is listed in this field, browse the healthcare businesses for sale on Deavo. Ask a Nova Scotia lawyer how the notice and reapplication under s.67 fit your closing timeline.