Lawyers do not get the share flexibility physicians and dentists get. Here is what the Business Corporations Act and Law Society By-Law 7 actually require — including the renewal deadline most people miss.
A lawyer in Ontario can practise through a corporation, but the route is narrower than most professionals expect — and materially narrower than the one available to physicians and dentists. Incorporation under the Business Corporations Act is the easy half. The corporation cannot practise law or provide legal services until the Law Society of Ontario issues a certificate of authorization.
Ontario Regulation 665/05 — the regulation that permits non-voting shares to be issued to a spouse, child or parent — contains exactly three sections: definitions, physician corporations, dentist corporations. That is the entire regulation. Lawyers are not in it.
So the general rule in the Business Corporations Act applies without modification: every issued and outstanding share of a law professional corporation must be legally and beneficially owned by a member of the same profession. No spousal shares. No trust for the children. If you have been told otherwise, the advice was probably borrowed from a medical structure.
Under Law Society By-Law 7, a certificate of authorization issues only where the corporation subsists under the Business Corporations Act, its name complies, and all of its directors are licensees whose licences are not suspended. Officers and directors must also be shareholders. The practical effect is that the corporation's governance and your standing as a licensee are welded together — a suspension is not only a personal problem.
Two layers apply. The corporate statute requires the name to end with “Professional Corporation” and prohibits a numbered company. The Law Society then applies its own standard: a firm name must be demonstrably true, accurate and verifiable, must be neither misleading, confusing nor deceptive, and must be consistent with a high standard of professionalism. That is a judgement standard rather than a formula, and it is the layer that catches people who have already filed articles.
The certificate is not permanent. By-Law 7 sets the renewal application deadline at January 31 each year, with the certificate running to December 31 of the year renewed. This is the obligation most often missed, because it does not feel like a filing — and a corporation practising law without a current certificate has a regulatory problem rather than an administrative one.
It does not limit your liability for your own professional negligence. Your insurance remains what stands between you and a claim. What the corporation offers is tax deferral, planning flexibility, and some protection from ordinary business liabilities unconnected to legal work.
Compare the position of physicians and dentists, who do get the family-share exemption, or read the general Ontario rules.
Yes, but not automatically. A law professional corporation must be incorporated under the Business Corporations Act and then obtain a certificate of authorization from the Law Society of Ontario before it may practise law or provide legal services.
No. The exemption that lets physicians and dentists issue non-voting shares to a spouse, child or parent applies only to those two professions. For a law professional corporation the general rule in the Business Corporations Act governs: every issued and outstanding share must be legally and beneficially owned by a member of the same profession.
Under Law Society By-Law 7, the Society will issue a certificate of authorization only if all of the corporation's directors are licensees whose licences are not suspended. Officers and directors must also be shareholders of the corporation.
Beyond the Business Corporations Act requirements — the name must end with "Professional Corporation" and cannot be a numbered company — the Law Society requires that a firm name be demonstrably true, accurate and verifiable, neither misleading, confusing nor deceptive, and consistent with a high standard of professionalism.
No. It must be renewed. Under By-Law 7 the renewal application is due by January 31 each year, and a certificate runs to December 31 of the year for which it is renewed. A lapsed certificate is a practice problem, not a filing inconvenience.
No. You remain personally liable for your own professional negligence, and your professional liability insurance remains what answers a claim. The corporation offers tax deferral and planning flexibility, and some protection from ordinary business liabilities unrelated to legal work.
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