New Rules For Family Members To Hold Non-Voting Shares

The anticipated new regulations are now in place to implement the changes promised in the Ontario Government’s 2005 budget.

As a result, professional corporations for physicians and surgeons are now permitted to have family members as non-voting shareholders.

For physicians or dentists having in place an existing professional corporation, the Articles or Charter will need to be reviewed to determine if the authorized share capital includes a non-voting class appropriate for such purpose. In addition, there will be some income tax considerations and possible elections or filings before non-voting shares are issued to family members.

In any event, there are corporate proceedings necessary to issue these shares as well as mandated notices and declarations which must be filed with the respective Colleges upon change in shareholdings.

For new incorporations, a flexible share structure should be considered to either accommodate proposed or potential future ownership by family members.

Please contact Tanya Leedale at the co-ordinates below for further information on these changes.

Dated: April 2006

The foregoing should not be considered to be legal advice and should not be relied upon as such. Please consult a lawyer to get advice and an opinion on your unique circumstances.