INCORPORATION OF PHYSIOTHERAPIST PRACTICES IN BC

We act for a number of professionals, including lawyers, realtors, doctors, dentists and physiotherapists, all of which are subject to various rules and regulations of their respective governing body. One of the matters that is regulated by these governing bodies is the ability of a professional to practice through a professional corporation and how the professional corporation can be structured. A professional corporation is a type of corporation whose business is limited to providing professional services. The decision by a professional to conduct their business or practice via a professional corporation is usually tax driven. Prior to incorporating a professional corporation it is necessary to review the applicable rules and regulations of the particular governing body in order to ensure that the structure of the professional corporation is in compliance with all such rules and regulations.

Recently, we were asked to incorporate a professional corporation for a physiotherapist in which the voting shares of the professional corporation were to be held by a holding company controlled by the physiotherapist. Physiotherapists are subject to the rules and regulations of both the College of Physiotherapists of British Columbia (the “College“) and the Health Professions Act (British Columbia) (the “Act“). Consequently, our client could not incorporate a professional corporation without first obtaining a permit from the College to do so.

During the incorporation process we were advised by the College that our proposed corporate structure for our client’s professional corporation would not be permitted by the College as the College did not allow a holding company controlled by a physiotherapist to hold the voting shares of a professional corporation. This policy was at odds with our review of the provisions of both the Act and the College’s bylaws (the “Bylaws“). In reviewing the Act and the Bylaws, we determined that there is nothing in either the Act or the Bylaws that prohibits a holding company controlled by a physiotherapist to own the voting shares of a professional corporation. In fact, Part 4 of the Act specifically allows for a holding company controlled by a registrant to own the voting shares of a professional corporation.

We also determined that pursuant to provisions in both the Act and the Bylaws, the College does not have the discretion to withhold a permit for a professional corporation if the applicant is in compliance with the Act and the Bylaws. We brought our position to the College and received confirmation from the College that they agree with our analysis and will be changing their policy going forward. This policy change will enable physiotherapists who wish to utilise such a corporate structure to do so in the future; and allow physiotherapist who were denied such a corporate structure in the past to change their corporate structure going forward.

If you would like further information about professional incorporations please contact Steven Fruitman at steve@magellanlaw.ca or (778) 726-0175.