How long have physicians been able to practice within a partnership or a company?
Answer: Since March 22, 2007, which is the date that the Regulation respecting the practice of the medical profession within a partnership or a company became effective, any physician registered on the membership roll of the Order may obtain the authorization of the Collège des médecins to practice the profession within a joint stock company (Inc.) or a limited liability partnership (LLP), which are the two (2) new corporate vehicles provided in the Regulation.
What steps must a physician follow to be able to practice within a partnership or a company?
Answer: A physician who wishes to practice his profession within a partnership or a company must request the authorization of the Collège des médecins and to do so he must follows the steps appearing on the “Five Steps to follow in order to practice in a partnership or company": www.cmq.org / professional practices / incorporation / five steps.
How long does the Collège des médecins expect the processing of requests for authorization to practice in a partnership or company to take?
Answer: The Collège has set an objective of fourteen days for processing requests for authorization.
How will a physician know that he has been authorized by the Collège des médecins to practice in a company and what is the validity date of such an authorization?
Answer: The Collège will send the physician or his representative a written confirmation of the authorization to practice the medical profession in a partnership or company. The validity date of this authorization will be the date on which all required and duly completed documents have been received.
Can the members assume that they can practice their professional activities in a partnership or company as soon as their documents are received by the Collège des médecins?
Answer: No. Given the verifications required, members must wait to be sure that they have obtained the College’s authorization before practicing in a partnership or company.
With whom can a physician wishing to practice in a partnership or company join forces?
Answer: A physician can only form a company with other physicians, his spouse, blood relatives or relatives by marriage or with legal entities, trusts or companies whose shareholders, partners or trustees are physicians, a spouse, blood relatives and/or relatives by marriage. He can join forces with a trust in which at least 50% of the voting rights associated with ownership interests are held by at least one physician and at most 50% by one of the following professionals: chartered administrator, lawyer, certified accounting professional or notary. Furthermore, all directors named by the partners or shareholders to manage the affairs of the company must be physicians.
What is meant by the term blood relatives or relatives by marriage?
Answer: “Blood relatives” are people linked to each other by a blood relationship. Thus, those people in the family of a physician who is a partner in the partnership or a shareholder in the company satisfy that definition.
“Relatives by marriage” simply means those people who were not born relatives to the physician but become relatives through marriage. Accordingly, people who are relatives of the spouse of a physician who is a partner or shareholder in a partnership or company satisfy this definition.
Can the de facto spouse of a physician be a partner or shareholder?
Answer: Yes. The Collège des médecins intends to apply the Regulation respecting the practice of the medical profession within a partnership or company in a way that allows the de facto spouse of a physician to own non-voting shares or units in the company or partnership. Relatives of the de facto spouse may also own non-voting shares or units in the company or partnership.
Can a spouse, blood relative or relative by marriage who is a member of another professional order own units or shares in the partnership or company of the physician member?
Answer: This is not prohibited. However, the rules regarding conflicts of interest based on the Code of ethics of physicians remain applicable, regardless of the existing partnership or corporate vehicle used.
Can a trust own shares?
Answer: The philosophy behind the Regulation respecting the practice of the medical profession within a partnership or a company is to ensure that effective control of the partnership or company is at all times held by a member in good standing of the Order. Thus, subparagraph (1) of section 1 of the Regulation covers voting shares, subparagraph (2) of the same section deals with shares, both voting or not, and finally subparagraph (3) covers membership on the Board of Directors. It is difficult to imagine why ownership of voting shares, directly or by way of a legal entity or a business, should be restricted to one or several physicians, but no such restriction apply to a trust.
In fact, a trust can own shares. It is the aspect of control that brings us back to the intention of the Regulation. If a trust owns shares that have voting rights, only physicians or one of the professionals contemplated in section 1, subparagraph (1) c) of the Regulation can be the trustee. When no voting rights are is associated with the units of the trust, the trustees could be one or several physicians, the spouse, relatives by blood or marriage of a physician or one of the professionals contemplated in section 1, subparagraph (2) d) of the Regulation.
Does the statement of intention provided in the Regulation respecting the practice of the medical profession within a partnership or a company stipulating that the partnership or company is formed for the purpose of practicing professional activities have to appear somewhere in the articles of incorporation or the partnership agreement?
Answer: For any question related to the drafting of articles of incorporation or a partnership agreement, members must contact the lawyer or other professional who will be arranging the incorporation of their company or partnership or the Registraire des entreprises du Québec. The role of the Collège des médecins is to ensure the application of the Regulation. The Collège does not have the obligation of guiding its members in drafting the relevant documents.
Is the Collège des médecins considering making a model charter or articles of incorporation accessible on its Web site?
Answer: No. The Collège does not plan to make a model charter or articles of incorporation accessible. It is the responsibility of the lawyer or other professional involved in the incorporation of the company or creation of the partnership to find the form generally used.
Does a physician who practices professional activities within a partnership or company have to practice all his professional activities within that partnership or company?
Answer: No. The fact that a physician practices certain professional activities within a partnership or company does not require him to practice all his professional activities within the partnership or company. He may decide to incorporate a portion of his practice for certain types of activities and not others. A physician may also practice professional activities within more than one partnership or company. There is no limit in this respect.
Can the employees of the company been other professionals governed by the Professional Code?
Answer: Yes. The fact that there are other professionals governed by the Professional Code within the company is possible. However, the ethical obligations remain applicable and are not set aside just because the professional concerned is an employee. The other activities that might be practiced by these professionals would then be considered incidental or related activities.
What form must the name of the company or partnership use? Does it have to contain the name of the physician(s), use a specific form or can it be a numbered company?
Answer: The name must comply with applicable laws and regulations. A physician is prohibited from making false, misleading or incomplete representations to the public or to a person who seeks his services in any way, but specifically with respect to his level of competence or the scope or effectiveness of his services and those generally assured by members of his professional. The name of the company must therefore not be misleading about the activities practiced within it, nor may it one already used by another company or result in confusion with a name already in use. It must be in French or have a French version.
An LLP [in French: S.E.N.C.R.L.] must necessarily indicate its legal form correctly by including the words “limited liability partnership” or the abbreviation LLP after its name. Moreover, a company name that does not include the term “corporation" or "joint stock company” must end with the abbreviations “Inc." or “Ltd.” to indicate that it is a limited liability company.
It is likewise allowed to include the expression “firm of professionals governed by the Professional Code” or the acronym “FPGPC” in or after the name of the partnership or company, thereby making it possible to distinguish firms composed of professionals from those made up of people not subject to a specific legal framework, but it is not compulsory to include this information.
Numbered companies (e.g. 1234-5678 Québec Inc.) are allowed. But the company name used with the public must be a compliant name expressed in words (e.g. Dr. Smith’s Medical Clinic). Thus, the company engages in its professional activities under a name other than its number. Moreover, the name expressed in words must be entered in section 3 of the Declaration for authorization to practice the medical profession within a partnership or company and in the section entitled “Other names used in Québec’’ on the site of the Registraire des entreprises du Quebec.
Likewise, physicians must clearly indicate in their advertising and on their stationery and any other identifying material their name, their status as general practitioner or, if they have a specialist's certificate issued by the Collège, that status. They may also mention the services they offer.
Are provincially and federally incorporated firms treated differently by the Collège des médecins du Québec?
Answer: Yes. Applications for firms incorporated federally must include, in addition to the same documents as those with a provincial incorporation, a Certificate of Compliance issued by Industry Canada.
Moreover, the Canadian Medical Association holds official marks for words or titles like the following: Dr., M.D., MD, Doctor, Docteur, Physician. In short, when a title is used in the name of a federally incorporated firm, it is necessary to check whether that title is registered as an official mark by the CMA. If so, consent to use one of its official marks must be obtained from that organization. Such consent can be obtained as follows: Write a short letter (preferably in English) to the Canadian Medical Association, giving the desired company name and as precise a description as possible of the firm’s activities. This letter must be sent by fax to (613) 526-7571. Within one or two weeks, the CMA will send a letter indicating their approval of the use of their official mark in the name. This letter, which serves as consent, must then be filed with Corporations Canada with the articles of incorporation. For any questions, please contact with Ms. Bonnie Holmyard at (613) 731-9331 ext. 2445.
What does the Regulation respecting the practice of the medical profession within a partnership or a company mean by “professional activities”?
Answer: The professional activities provided in the Regulation includes all the activities that are at the core of the medical profession, i.e. the activities reserved for physicians listed in section 31 of the Medical Act:
31. The practice of medicine consists in assessing and diagnosing any deficiency in health and in preventing and treating illness to maintain or restore the health of a person in interaction with his environment.
The following activities in the practice of medicine are reserved to physicians:
(1) diagnosing illnesses;
(2) prescribing diagnostic examinations;
(3) using diagnostic techniques that are invasive or entail risks of injury;
(4) determining medical treatment;
(5) prescribing medications and other substances;
(6) prescribing treatment;
(7) using techniques or applying treatments that are invasive or entail risks of injury, including aesthetic procedures;
(8) providing clinical monitoring of the condition of patients whose state of health is problematic;
(9) providing pregnancy care and conducting deliveries;
(10) making decisions as to the use of restraint measures; and
(11) deciding to use isolation measures in accordance with the Act respecting health services and social services (chapter S-4.2) and the Act respecting health services and social services for Cree Native persons (chapter S-5).
Can a company engage in activities other than professional activities?
Answer: Although a company must be incorporated for the purposes of engaging in professional activities, incidental or related activities, i.e. those that “follow from” or depend on the main activity, are authorized (e.g. real estate investments/property leasing/establishment management activities/teaching/research activities). The incidental or related activities must at all times remain secondary to the professional activities, in terms of effort involved, investment required or revenue generated. Furthermore, it is important to note that acts that are prohibited to physicians are likewise prohibited within the company within which they practice. For example, the Medical Act prohibits a physician from selling prostheses other than contact lenses.
It is also important to note that non-incidental activities may be practiced within the company, i.e. activities that do not result from or depend on the main activity (e.g. operation of a store or restaurant). However, it would be wiser, in terms of the image and dignity of the medical profession, for non-incidental activities to be practiced within a separate company.
Do holding and investing amounts not necessary for the conduct of the company’s professional activities contravene the Regulation?
Answer: The Collège des médecins considers that a company owning and investing liquidities in excess of what is required to operate the business does not contravene Article 1 of the Regulation. In effect, it is incidental to the principal activity, which is the practice of the medical profession. It should be noted that no maximum amount (or percentage of sales or value of the assets) has been set as an "amount not necessary." It is by definition something secondary to the principal activity.
How will the Régie de l’assurance maladie du Québec (RAMQ) know that a physician is authorized to practice in a partnership or company?
Answer: The Collège des médecins will send the RAMQ daily information on its members authorized to practice in a partnership or company.
Does a physician authorized by the Collège to practice in a partnership or company have to notify the RAMQ of changes (payment to a third party)?
Answer: When sending a physician written confirmation of his authorization to practice in a partnership or company, the Collège will also send that physician, on the second page of the confirmation, the Internet address of the RAMQ where all the forms necessary for this purpose can be found.
How will the physicians be remunerated?
Answer: The physicians will invoice the RAMQ or another source (if they are in private practice, for example) that will pay them their fees.
Will RAMQ issue the cheque in the name of the company or the physician?
Answer: The physicians must contact the RAMQ for all questions on this matter.
Is the Canadian Medical Protective Association (CMPA) ready to answer member questions?
Answer: The CMPA knows about the coming into force of the Regulation respecting the practice of the medical profession within a partnership or a company and has all the information necessary to assist members with their liability umbrella insurance. In fact, all members wishing to practice their profession within a company must inform the CMPA. (Members not insured with the CMPA must contact their own private insurer.) The CMPA will decide whether the general letter of the CMPA sent to the Collège des médecins is applicable. If it is, it is equivalent to the required insurance attestation, which will not have to be submitted with the Declaration for authorization to practice the medical profession within a partnership or company. If, on the other hand, the CMPA decides that the letter does not apply, the member will have to attach to the declaration a written confirmation, attesting that the Partnership or Company has professional liability coverage (liability umbrella insurance). (For members not insured with the CMPA, they must automatically send a written confirmation attesting that the Partnership or Company has professional liability coverage.)
Does the physician have to update the information contained in the Declaration for authorization to practice the medical profession within a partnership or company?
Answer: Yes. The physician must notify the secretary of the Collège in writing of any change in the information sent in his declaration likely to contravene the Regulation respecting the practice of the medical profession within a partnership or a company. Such notification must be sent using the Amending Declaration and must be received by the secretary of the Collège within 30 days of the change. Specifically, the College must be notified of the cancellation of the coverage contemplated in Division III, the dissolution, assignment of assets, bankruptcy or voluntary or forced liquidation of the company or any other cause likely to prevent the continuation of his activities with the company. The physician must also, every year at the time of paying his annual dues, update the information contained in the Declaration.
Are there charges applicable when a member sends the Collège an Amending Declaration or when the member makes the annual update?
Answer: An annual charge of $25.00 is imposed on each member practicing in a partnership or company, payable at the same time as the annual dues. The fee represents the cost of systems development, record processing, updating, verifying data, offering information and providing IT support. This annual fee is not based on the modification submitted by the respondent from the partnership or company but rather on the annual update of each member practicing in a partnership or company.
What control and supervisory measures for physicians practicing within a partnership or company will the Collège propose?
Answer: The Collège will apply the same control and supervisory measures to physicians who practice in a company as those currently applied to all physicians practicing in Québec.
Is there a register of physicians practicing in a partnership or company?
Answer: Yes. The Collège has created a register of physicians practicing in a partnership or company. The Collège will exercise rigorous monitoring of the activities of these enterprises to ensure compliance with the Code of ethics of physicians and applicable regulatory provisions and ensure protection of the public.
Does the partnership or company have to send all the patients of its partners or shareholders a request for authorization in order to be able to access their medical records?
Answer: No. It is not necessary to institute such a procedure since the physicians are required to comply with the applicable ethical obligations. Furthermore, no obligation to this effect is provided in the Regulation respecting the practice of the medical profession within a partnership or a company.
Does a physician struck from the roll have to sell or divest his shares or units?
Answer: Not necessarily. First of all, the sale of shares or divestment of units is applied only to physicians who are struck from the roll for more than 3 months. The scenarios vary according to the case:
First case: The physician is the only member of the Order directly or indirectly owning shares or units, the other owner shareholders or partners being a legal entity, a trust, a spouse, a blood relative or a relative by marriage. In this case, the fact that the physician is struck from the roll does not affect the amounts owed to the physician from acts performed before being struck and due from the RAMQ or another source of revenue. However, the partnership or company would cease to receive them afterwards because of the fact that the physician no longer practices medicine.
Second case: The physician is not the only member of the Order directly or indirectly owning shares or units, because there are several physician shareholders or partners. In this second case, and to the extent that other persons qualified to practice medicine remain shareholders or partners, the physician must assign, give away or otherwise divest himself of his shares or units. Those who owned shares or units based on the physician who has been struck must also divest theirs. They must likewise cease to be an executive director or representative of the legal entity.
This said, prudent physicians who decide to act collectively within a legal entity should take the trouble of adopting, from the outset, a unanimous shareholders' or partners' agreement and resolve this matter. There could be, for example, a clause entitled "withdrawal from business," which could provide for various situations that would include physical incapacity, retirement, striking from the roll for more than 3 months, bankruptcy, etc. Business withdrawal clauses usually contain provisions covering the purchase, by the other shareholders or partners, of the shares or units of the person who is withdrawing from business either voluntarily or by force or the buy-back of his shares or units by the company. Such clauses also describe the procedure to be followed to determine the price or value the shares or units.
Is indirect ownership by a “holding company” (a company whose assets consist essentially of shares of other companies) possible?
Answer: There is no doubt that all of the voting rights associated with shares or units must be owned by one or more physicians. The other shares or units without voting rights can only be held by the spouse of a physician who is a partner or shareholder in the company or by a blood relative or a relative by marriage of that person, as provided in the Regulation respecting the practice of the medical profession within a partnership or a company.
Can the Collège recommend a firm (e.g. chartered appraisers) to value a medical practice?
What are the advantages for a physician of practice in a company or partnership?
Answer: The advantages of practicing medicine in a company or partnership are essentially fiscal and organizational in nature.
What are the impacts for the public of medical practice in a company or partnership?
Answer: The practice of the medical profession in a company or partnership changes nothing for the public and in no way affects the control and supervisory powers of the Collège over all its members. The ethical and civil rules remain the same, such that neither civil remedies nor ethical remedies are altered.