INCORPORATION FREQUENTLY ASKED QUESTIONS
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1 INCORPORATION FREQUENTLY ASKED QUESTIONS THE REGULATION AND PARTNERSHIPS OR COMPANIES Q1: Which members are subject to the requirements of the Regulation? A1: Only the members who intend to benefit from a legal structure - a limited liability partnership (a partnership ) or joint-stock company (a company ) - are subject to the requirements of the Regulation, i.e. are required to produce a Declaration, pay the administration fees and update the information provided. Q2: What is the purpose of the Regulation and the scope of the avis de production (notice of filing) that the Ordre des dentistes du Québec (ODQ) has to issue before a member can practise dentistry within a partnership or company? A2: By virtue of the Regulation, the ODQ authorizes its members to carry on their professional activities within a partnership or company as provided for by the Professional Code. The ODQ simply certifies receipt of the required documents. The accuracy of the information provided under the Regulation remains the responsibility of the members. Q3: Are members limited as to the jurisdiction of their company? A3: No. A company may be incorporated federally or provincially. In either case, the company must meet all the requirements of the Act respecting the legal publicity of sole proprietorships, partnerships and legal persons. Q4: Does a list of all directors, representatives and officers of the partnership or company have to be provided? A4: Yes. The Declaration requires that all ODQ members practising dentistry in a partnership or company, whether they are partners or shareholders, be listed with their management duties, where relevant (see sections 2, 4 and 6). The Regulation expressly states that the ODQ may 1
2 require the communication of a complete and up-to-date register of the people carrying on management duties within the partnership or company. PARTNERS OR SHAREHOLDERS Q5: Who, for the ODQ, qualifies as a spouse or relative entitled to hold non-voting shares of a company? A5: The ODQ uses the concepts defined by Quebec lawmakers in their laws, including the Civil Code of Québec and the Interpretation Act. For example, to be a relative of a member, the person must be related to the member by blood or adoption. To be a de facto spouse of a member, the person must, among other criteria, be regarded as the member s spouse, live with the member, and be publicly represented as the member s spouse. Q6: When a trust holds the shares of a company, does the trustee or the beneficiary have to qualify as a member, spouse or relative? A6: The trustee has to qualify, since in the case of a trust, it is the trustee who exercises control. As for the beneficiary(ies), the Regulation does not provide any specific restrictions. Q7: May a member be a partner or shareholder of more than one partnership or company? A7: Yes. There is nothing in the Regulation against it. Q8: May members of other professional orders hold partnership or company shares with voting rights? A8: No. The Regulation does not open the door to multidisciplinarity. Fee sharing with nonmembers is expressly prohibited by the Code of Ethics of Dentists. Q9: May non-voting shares be held by members of other professional orders? A9: Yes, but in a very restricted way, provided they belong to one of the groups mentioned in the Regulation who are allowed to hold such shares, e.g. a relative, by direct or indirect line of descent, or the spouse of an ODQ member who holds shares contemplated in paragraph 1 of section 3 of the Regulation. However, these people may not carry on professional activities or management duties within the company. NAME OF PARTNERSHIP OR COMPANY Q10: Does the name of a partnership or company have to include the name of one or certain dentists practising there? 2
3 A10: In the case of companies, this is no longer necessary. The abbreviation FPGPC may be included, but is not required either: dentists who incorporate may thus choose a company name that does not include their own name. In the case of partnerships, whether limited liability partnerships or not, the situation is different. General partnerships and limited liability partnerships are still required to comply with section 36 of the Dental Act; their name must thus include the name of at least one of the partners. In addition, ODQ members who carry on their professional activities within a limited liability partnership must include the words limited liability partnership or the abbreviation LLP in the partnership name. Q11: Are there other restrictions regarding the name that may be chosen for a partnership or company? A11: Yes, the partnership or company name must comply with all the laws and regulations that apply to dentists themselves. For example: The partnership or company name may not imply a specialty that partner or shareholder members do not have, thus breaching the pertinent provisions of the Code of Ethics of Dentists; The use of words like aesthetic or spa breaches the present scope of sections 26 and 27 of the Dental Act, which do not refer to aesthetic-type interventions; The words professional corporation are to be avoided because they could violate the requirements of section 30 of the Professional Code; It is important to ensure that the name of an existing partnership or company that is used to carry on professional activities is adapted to the new business purpose of the partnership or company; words like management, service corporation, etc. are thus to be avoided. Q12: May a member continue using his or her own name or any other clinic name he or she has been using prior to incorporation? A12: Yes, provided the member fills out the appropriate section of the Declaration and complies with the requirements of the Registraire des entreprises. ACTIVITIES OF PARTNERSHIP OR COMPANY Q13: Does the business purpose of the partnership or company have to be limited to the practice of dentistry? A13: No. Incidental or secondary activities related to the practice of dentistry (expert assessment, investment, leasing) may also be carried on. In addition, the primary activity, i.e. the practice of dentistry, must be set out in the articles of incorporation or amendment. In the case of an existing partnership or company, the business purpose must be amended. 3
4 Q14: Do all places of business of partner or shareholder members have to be listed in the Declaration? A14: Yes. The partnership or company s head office or one of its establishments must correspond to one of the addresses listed in the ODQ Roll for a member who is a partner or shareholder (see section 1 of the Declaration, articles 1 and 4). Q15: Does all the information in the Declaration have to be updated as soon as a change takes place? A15: No. It has to be updated annually, unless the change affects compliance with (1) the terms and conditions for holding voting or non-voting partnership rights or company shares (e.g. revocation of a fellow shareholder s licence, divorce or separation from a spouse holding nonvoting shares) and with (2) the other requirements of section 3 of the Regulation (see section 6 of the Regulation). However, a compulsory change made to the Roll of the ODQ, in particular regarding the addition or deletion of a member s place of business, will be annotated in the file of the partnership or company within which the member is practising. FORMALITIES, FEES AND DOCUMENTS REQUIRED Q16: What is the purpose of the Declaration that members are required to file with the ODQ? A16: The Declaration is the main tool used by the ODQ to administer the incorporation of its members. In this respect, the Declaration, its amendments and especially the sworn attestation it includes assure the ODQ that the terms of the Regulation will be met at all times. Q17: What does the sworn attestation required in the Declaration consist in? A17: Having the respondent sign the Declaration before the appropriate authority. In Quebec, commissioners of oaths duly authorized by the Minister of Justice, some public officers as well as lawyers and notaries have the power to administer an oath to individuals where an act or regulation so requires. To be valid, the oath must be taken before one of these authorities. A Declaration that has not been sworn before one of these authorities or that has been sworn under irregular circumstances will not be accepted by the ODQ and will cause a delay in the processing of the file. Q18: What documents are required by the ODQ in support of the application? A18: Unless there are special circumstances, the documents listed in section 7 of the Declaration must be produced; they meet all the requirements of the Regulation. Q19: Does a sole dentist who incorporates have to publish a notice in a newspaper having general circulation in each place where he or she has a place of business? 4
5 A19: No. It is only when an existing general partnership is continued as a limited liability partnership or when the partners of such a partnership form a joint-stock company to pursue their activities that a notice has to be published. Q20: Is the information given to the ODQ about a partnership or company public? A20: The information about members is public only insofar as required by the Professional Code; when it comes to the information about a partnership or company, corporate advertising rules guarantee transparency for the public. STARTING DATE FOR PRACTISING DENTISTRY WITHIN A PARTNERSHIP OR COMPANY Q21: May members start carrying on their professional activities within a partnership or company before receiving the notice of filing from the ODQ? A21: No. Members may not begin practising dentistry within a partnership or company before the starting date, which is confirmed by the ODQ in the notice of filing sent to the respondent. Q22: May the starting date be retroactive to the incorporation date? A22: No. The starting date corresponds to the date the ODQ receives the Declaration required by the Regulation and all the supporting documents. As the Regulation indicates, members must provide the Declaration and the documentation prior to exercising their professional activities. Q23: May a later starting date be chosen? A23: Yes. There is noting in the Regulation against a later date being chosen, e.g. for tax planning purposes. ETHICAL OBLIGATIONS Q24: Are the professional obligations of ODQ members in some way lessened when they carry on their professional activities within a partnership or company? A24: No. The Code of Ethics of Dentists was amended to ensure that the practice of dentistry within a partnership or company in no way changes the ethical and civil obligations of their members toward the public and the ODQ. In fact, new obligations have been added, namely regarding conflicts of interest and signing of agreements that could affect the quality of services provided by ODQ members. 5
6 Q25: Do all fees for professional services provided within a partnership or company by all the ODQ members practising therein belong to the partnership or company? A25: Yes. When a dentist carries on his or her professional activities within a partnership or company, the revenues generated by the professional services he or she renders within and on behalf of the partnership or company belong to the partnership or company, unless otherwise agreed. Q26: Do specific measures need to be taken with regard to the patients of members who continue their professional activities within a joint-stock company? A26: No. Neither the sale of all files to the company or the consent of patients to the transfer is required; however, it would be advisable for members to notify their patients about the change, assuring them that it in no way changes members professional obligations towards them. ODQ PROFESSIONAL LIABILITY INSURANCE FUND Q27: Can the ODQ provide proof of the partnership or company s security against professional liability? A27: No. Only the ODQ Professional Liability Insurance Fund can provide the proof required by the Regulation; it is the responsibility of members wishing to carry on their professional activities within a partnership or company to obtain that proof. Q28: Does the ODQ Professional Liability Insurance Fund have to be notified when a member starts practising dentistry within a partnership or company? A28: No. The ODQ sends the Professional Liability Insurance Fund a copy of the notice of filing as soon as it is sent to the member. RÉGIE DE L ASSURANCE MALADIE DU QUÉBEC Q29: Does a member have to contact the Régie when he or she starts practising dentistry within a partnership or company? A29: Yes. The ODQ sends the Régie a copy of the notice of filing as soon as it is sent to the member. The Régie is thereby notified of the existence of the new partnership or company and the members practising within it. The member is then responsible for opening a new administrative account on behalf of the partnership or company with the Régie (see the form on the ODQ s Web site at under Quick Links Practice within a Partnership or a Company). 6
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