The question usually arrives the same way. A physician or dentist in their early sixties has a corporation with a seven-figure balance sheet, is about to stop practising, and has been told the choice is between winding it up and paying the tax, or keeping it alive and paying the College every year for the privilege. Neither is a good answer, and neither is the only answer.
Why the corporation survives
Section 3.1(1) of the Business Corporations Act defines a professional corporation as a corporation “that holds a valid certificate of authorization or other authorizing document issued under an Act governing a profession.” Professional-corporation status is an attribute of holding the certificate. Section 3.3(2) completes the thought: on revocation of the certificate, “the corporation ceases to be a professional corporation.”
It does not cease to be a corporation. It is the same legal person it was the day before, incorporated on the same date, with the same business number, the same capital dividend account, the same refundable dividend tax on hand, and the same retained earnings. There is no deemed disposition and nothing is realised, because nothing has been disposed of.
The Ontario Medical Association described the same route in 2020: convert it to a standard business corporation, reflected by a change of name and an amended scope of activities, after which the corporation “no longer needs to report to your college of medicine, pay college fees.”
The name has to change — that part is a statutory duty
Section 3.3(4) is one sentence and it is mandatory: “A corporation that ceases to be a professional corporation shall change its name to remove from it the word ‘professional’ or ‘professionnelle’.”
Note how narrow the express duty is. What the statute compels is removal of the word “professional.” The surname and the profession descriptor — the “Smith Medicine” part — are no longer required once the health-profession naming rules stop applying, but section 3.3(4) does not itself compel their removal. In practice the whole name is replaced, and a number name becomes available for the first time, because the prohibition on number names in section 3.2 applies only while the corporation is a professional corporation. For a private investment company a number name is often exactly what you want.
Three amendments, not one
Articles of amendment under section 168 do the work. Three of the listed powers are the ones that matter:
| Amendment | Why |
|---|---|
| 168(1)(a) — change the name | Required by s. 3.3(4). Drop “Professional Corporation”; a number name is now permitted. |
| 168(1)(c) — remove the restriction on the business | Section 3.2(2) required the articles to say the corporation may not carry on a business other than the practice of the profession. Leave it in and the corporation is contractually confined to a practice it can no longer carry on. |
| 168(1)(n) — remove share transfer and ownership restrictions | The articles restrict shareholders to College members. Leave it in and the shares cannot later be held by a spouse, a trust or a holding company. |
Authorization is by special resolution under section 168(5), and the amendment takes effect when the Director endorses the certificate of amendment. The government fee is modest — this is a filing, not a transaction.
The second and third are the ones people forget. A corporation that changes its name but keeps the practice-only object and the College-member share restriction has done the cosmetic half and left the constraints in place.
The order matters more than the steps
Section 4 of O. Reg. 39/02 is the trap. Subsection (1) requires a corporation holding a certificate of authorization to promptly notify the College if it changes its name or its articles, with a copy of the endorsed certificate. Subsection (2) then provides that a corporation which fails to do so ceases to be eligible to hold the certificate. Automatically. Not at the College’s discretion.
So filing the amendment first, while the certificate is still live, produces an odd result: the amendments you are making — removing the profession from the name, deleting the practice restriction — are themselves disqualifying, and you now have a notice obligation about them. Deal with the certificate first, then amend. Not the other way round.
How you deal with the certificate depends on your regulator, and here the regimes are genuinely uneven.
The Law Society has a clean exit: By-Law 7 provides for applying for permission to surrender the certificate. CPSO and RCDSO appear not to. O. Reg. 39/02 provides for revocation and for non-renewal, and I have not found a published surrender procedure at either College. In practice that means a physician or dentist either lets the certificate lapse at renewal or triggers revocation by ceasing to be eligible — which happens anyway on resignation from the register, because the corporation then has no voting shareholder who is a College member. Before you build a timetable around it, ask the College directly what it expects, because whether you can act now or must wait out a renewal cycle changes the sequence.
Two timing details worth having. RCDSO certificates all expire 31 August and are revoked 1 September, and RCDSO is explicit that a revoked certificate cannot be renewed — the only way back is a fresh $750 application. So for a dentist who might yet return to practice, letting it lapse is not a reversible decision. And the Law Society may refuse a future certificate to a lawyer who was a director, officer or shareholder of a corporation whose certificate was revoked, so a lapse can follow you into the next corporation.
What you still carry
Converting the corporation does not shed professional liability. Section 3.4(4) of the Business Corporations Act makes a person jointly and severally liable with the corporation for professional liability claims arising from errors and omissions made while that person was a shareholder. Section 3.4(5) caps that at what the liability would have been had the person not practised through a corporation — but it does not remove it, and it does not stop running because you changed the name. Run-off coverage is a separate conversation and it is the one to have first.
If the professional dies still holding the corporation
The certificate does not die with them. Section 3.3(1) says a professional corporation’s certificate “remains valid and the corporation does not cease to be a professional corporation” despite the death of a shareholder.
How long the estate has is genuinely unsettled, and anyone who gives you a number is guessing. Section 3.3(3)(b) empowers Cabinet to prescribe how the shares are to be dealt with and the time within which — and that power has not been exercised. Neither O. Reg. 39/02 nor O. Reg. 665/05 contains a death provision, an estate provision or a time limit — the words simply do not appear. Meanwhile the ongoing eligibility condition still requires each voting share to be owned by a College member, and an executor is not one.
The practical reconciliation is that section 3.3(1) buys the estate time and the College’s 60-day notice-and-revocation process supplies the outside date in fact. But that is inference from the instruments, not a published rule. What it means for planning is simple enough: if the professional is the only voting shareholder, the estate has no way to keep the corporation as a professional corporation, and the conversion described above is where it is heading regardless. Better to design for that in the will than to discover it in probate.
What to take to your accountant
The corporate steps are the easy half. The reason to do any of this is what happens to the money afterwards, and that is a tax conversation, not a legal one. Worth putting on the agenda: how the retained earnings come out and over what period; the capital dividend account and refundable dividend tax on hand balances; whether the corporation should hold the investments at all given the passive income grind; whether a spouse or adult children should hold shares once the College restrictions are gone, and how the split income rules treat that after 65; and whether any part of the practice sale can still support a capital gains exemption claim.
The point of doing the corporate work properly is that it keeps every one of those options open. Winding the corporation up closes most of them permanently, and it is the default a lot of people fall into simply because nobody told them there was a third door.
Common questions
Do I have to dissolve my professional corporation when I retire?
No. Under section 3.1 of the Business Corporations Act, a professional corporation is a corporation that holds a certificate of authorization. When the certificate goes, section 3.3(2) says the corporation ceases to be a professional corporation, but it remains the same corporation with the same charter, tax accounts and retained earnings. It can continue as an ordinary Ontario corporation holding investments. There is no dissolution and no deemed disposition.
What has to change if I keep the corporation?
Section 3.3(4) requires the name to change to remove the word 'professional'. Beyond that, articles of amendment under section 168 should also remove the article restricting the business to the practice of the profession, and the share ownership and transfer restrictions limiting shareholders to College members. All three are done in one filing, authorized by special resolution.
Can the corporation have a number name afterwards?
Yes. The prohibition on number names in section 3.2(2) applies only while the corporation is a professional corporation. Once it ceases to be one, a number name becomes available, which is often what a private investment holding company wants.
Should I file the articles of amendment before or after dealing with my College?
After. Section 4 of Ontario Regulation 39/02 requires a corporation holding a certificate of authorization to notify the College promptly of any change to its name or articles, and provides that failing to do so means the corporation ceases to be eligible to hold the certificate. Since the amendments themselves are disqualifying, filing them while the certificate is live creates a problem. Deal with the certificate first.
Can I surrender my certificate of authorization?
The Law Society of Ontario has an express surrender procedure in By-Law 7. CPSO and RCDSO do not appear to publish one; Ontario Regulation 39/02 provides for revocation and for non-renewal only. In practice a retiring physician or dentist either lets the certificate lapse at renewal or ceases to be eligible on leaving the register. Ask your College directly what it expects, because it affects the timing.
What happens if I miss the RCDSO renewal date?
RCDSO certificates expire 31 August and are revoked effective 1 September. RCDSO states that a revoked certificate cannot be renewed, so the only route back is a fresh application at the full initial fee. For a dentist who might return to practice, letting the certificate lapse is not a reversible decision.
Does converting the corporation end my professional liability?
No. Section 3.4(4) of the Business Corporations Act makes a person jointly and severally liable with the corporation for professional liability claims for errors and omissions made while that person was a shareholder. Section 3.4(5) caps that at what the liability would have been had the person not practised through a corporation, but it does not remove it and it is unaffected by a name change. Run-off insurance is a separate question and should be dealt with first.
What happens to a professional corporation if the professional dies?
Section 3.3(1) of the Business Corporations Act says the certificate remains valid despite the death of a shareholder. How long the estate has to deal with the shares is not prescribed: the regulation-making power in section 3.3(3)(b) covering the time within which shares must be dealt with has not been exercised, and Ontario Regulation 39/02 contains no death or estate provision. Because the eligibility rules still require voting shares to be held by a College member, an estate cannot hold them indefinitely. Anyone who gives you a specific number of months is inferring it.