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

Buying a veterinary clinic in Quebec means buying into a regulated profession whose rules sit in provincial law. Subject to rights the law expressly grants to other professionals, the Veterinary Surgeons Act bars anyone but a veterinary surgeon from performing the acts it describes in section 7. The Ordre des médecins vétérinaires du Québec is the professional order for those veterinary surgeons. When a clinic is run through a limited liability partnership or a joint-stock company, a regulation under the Act, M-8, r. 12, adds its own conditions on who may hold the voting rights, who sits on the board and what is filed with the Order. This guide covers those Quebec rules only, and what they mean for a share or asset purchase.

Who regulates veterinary practice in Quebec

The base rule is Quebec’s Veterinary Surgeons Act, chapter M-8. The Ordre des médecins vétérinaires du Québec publishes an admission and permit-application section on its website, so a buyer who is not already a veterinary surgeon should read it first and ask the Order how their own situation is handled. This guide does not describe the admission route. Veterinary drugs are a separate, federal layer: Health Canada’s Veterinary Drugs Directorate applies the Food and Drug Regulations under the Food and Drugs Act to veterinary drugs offered for sale in Canada. Ask the seller how the clinic’s drug stock and dispensing records were handled, but do not look for the answer in Quebec’s ownership rules.

Who may hold the voting rights of a Quebec clinic company

Under regulation M-8, r. 12, veterinary surgeons may carry on their professional activities within a limited liability partnership or a joint-stock company if, at all times, the voting rights attached to its shares or units are held by the persons the regulation lists. The list includes veterinary surgeons and legal persons, trusts or other enterprises whose own voting rights are held entirely by at least one veterinary surgeon. In a joint-stock company, the regulation also lists who may hold the non-voting shares. Another condition is that no manufacturer or wholesaler of medications or food for animals, and no person holding the share position the regulation describes in such a business, holds shares or units. Because the conditions apply at all times, ask a Quebec lawyer whether your holding structure, and whoever stands behind it, meets them from the day of closing. Read section 1 itself rather than relying on this summary.

Directors, the chair and voting agreements

The same regulation sets a rule on the make-up of the board of directors of the joint-stock company, or the directors of the limited liability partnership, requiring veterinary surgeons among them in the proportion it states. It also requires the chair of the board, or the person performing similar duties in a partnership, to be a veterinary surgeon and, as the case may be, a voting shareholder or a partner. Voting agreements and proxies are controlled as well: only a veterinary surgeon may be granted, by voting agreement or proxy, the voting rights attached to a share or unit held by a veterinary surgeon or by one of the listed enterprises. A shareholders’ agreement or a proxy arrangement therefore needs checking against this regulation, not only against corporate law.

What transfers on a share sale and on an asset sale

The provisions read for this guide do not say what happens to a clinic company’s standing when it is sold, so ask rather than assume. If you buy the shares, the company stays the same legal person, but the regulation tests who holds its voting rights, so confirm that your structure satisfies it from closing. If you buy assets into a new company, that company is a different entity: ask the Order what must be provided before the veterinary surgeons practise within it. One more check applies to people. If a veterinary surgeon is struck off the roll for a period in excess of 3 months, or has had their permit revoked, the regulation bars them from directly or indirectly holding units or shares during that period. Ask whether any current holder has that history.

What goes to the Order before practising in the company

Before beginning to practise within such a company or partnership, a veterinary surgeon must give the Order’s secretary the documents the regulation lists. They include a written document from a competent authority certifying that the company or partnership is covered by the security the regulation requires. For a joint-stock company they also include the address of the head office and of its Quebec establishments and the names and home addresses of its directors and officers. The security may be an insurance or suretyship contract, membership in a group plan contract entered into by the Order, or a contribution to a professional liability insurance fund. The veterinary surgeon must also promptly notify the Order of any change in the security, or in the information declared, that may affect compliance. Ask a Quebec lawyer how these filings fit the closing timetable.

What to ask the seller for

Ask for documents that let you test the regulation’s conditions rather than accept a description of them. For the wider purchase steps, the national guide to buying a veterinary clinic in Canada applies, and healthcare businesses for sale lists current listings.

• The register of directors and the share or unit register of the clinic company or partnership, to test who holds the voting rights.
• Every shareholders’ agreement, voting agreement and proxy, so each can be read against the regulation’s limits on who may exercise voting rights.
• The written security document given to the Order and the insurance, suretyship or group plan contract behind it.
• A copy of what the veterinary surgeons gave the Order’s secretary before practising within the company, and any later notice of change.
• Any record that a holder was struck off the roll or had a permit revoked, and any supplier relationship with a manufacturer or wholesaler of animal medications or food that involves shareholdings.