By Hani Al-Dajane
To expand their healthcare business opportunities, pharmacists sometimes consider buying into medical clinics operated by physicians through a medicine professional corporation. However, there are several regulatory restrictions on pharmacists becoming shareholders of a medicine professional corporation.
In addition to applicable laws and regulations, Ontario physicians are governed by the policies of the Royal College of Physicians and Surgeons of Canada (CPSO). This article provides a brief overview of some considerations for physicians when pharmacists buy into a medical clinic.
Notice Requirements
Under section 85.9 of the Regulated Health Professions Act, 1991, and the CPSO policies, corporations practicing medicine must notify the CPSO of any changes in the CPSO-registered physician shareholders within 15 days of the shareholder change.[1] However, The CPSO does not require notice for the addition or removal of non-physician shareholders.[2]
This means that physicians are not obliged to notify the CPSO of new pharmacist shareholders of a medicine professional corporation.
Restrictions on Pharmacist Shareholders of a Medicine Professional Corporation
Director and Officer Restrictions
Section 2(2) of the Health Professional Corporations regulation (O. Reg. 665/05) (HPC Regulation) requires that all officers and directors of a medicine professional corporation also be shareholders who are members of the CPSO.
Consequently, pharmacists cannot be in a director or officer position of a medicine professional corporation unless they are also licensed physicians.
Voting Shares Restrictions
Section 2(1) of the HPC Regulation requires that all voting shares of a medicine professional corporation be owned, directly or indirectly, by physicians registered with the CPSO.
Similar to the director and officer restrictions, pharmacists are barred from owning voting shares of a medicine professional corporation operating a clinic unless they are also registered with the CPSO.
Non-Voting Shares Conditions
There are less restrictions on the ownership of non-voting shares. Section 2(1) of the HPC Regulation allows non-voting shares of a medicine professional corporation to be owned by a person who falls into one of the three following categories:
- A CPSO-registered physician;
- A family member of a voting physician shareholder; or
- An individual as trustee in trust for one or more children of a voting physician shareholder who are minors and beneficiaries of the trust.
Under the first category, a pharmacist who is also a registered physician can hold non-voting shares of a medicine professional corporation.
For the second category, a “voting physician shareholder” is defined as a member of the CPSO that owns voting shares of a medicine professional corporation. The CPSO deems a physician’s stepchildren, stepparents, and common law spouses as eligible family member shareholders of a medicine professional corporation.[3] However, parents-in-law are not eligible as family member shareholders. Thus, pharmacists who are one of these eligible family members may hold non-voting shares in a medicine professional corporation.
Under the third category, trustee ownership of shares of a medical professional corporation must abide by several restrictions. Pharmacist trustees may own shares where they, as trustees, own non-voting shares in trust for one or more children of a voting physician shareholder, and where those children are minors and beneficiaries of the trust.[4]
Unanimous Shareholder Agreements
If a pharmacist falls into one of the three above categories to own non-voting shares of a medicine professional corporation, then they may be party to a valid unanimous shareholder agreement so long as all the voting and non-voting shareholders are compliant with the restrictions for medicine professional corporations (HPC Regulation, s. 2(4)).
However, non-physician pharmacists do not have the power to restrict the discretion of powers of the directors of a medicine professional corporation under a unanimous shareholder agreement (HPC Regulation, s. 2(6)).
Takeaways
Although physicians are not required to notify the CPSO of new pharmacist shareholders, they should ensure that pharmacists buying into their medical professional corporation fall into one of the limited categories for non-voting shareholders. Moreover, physicians should note the appropriate role for pharmacists who are party to a unanimous shareholder agreement.
Contact the lawyers at Emerge Law for help structuring a share purchase that complies with applicable regulations and CPSO policies.
Thank you to Ephraim Barrera for his contribution to this article. The contents of this article are not to be construed as legal advice. Contact Emerge Law’s lawyers for legal assistance.
[1] CPSO, “Incorporation Issuance and Renewal” (2025) < https://www.cpso.on.ca/Physicians/Your-Practice/Registration-Renewals-and-Incorporation/Incorporation-Issuance-and-Renewal>.
[2] CPSO, “Frequently Asked Questions about Incorporation” (2025) < https://www.cpso.on.ca/Physicians/Your-Practice/Registration-Renewals-and-Incorporation/Incorporation-Issuance-and-Renewal/Frequently-Asked-Questions-about-Incorporation>.
[3] CPSO, “Frequently Asked Questions about Incorporation” (2025) < https://www.cpso.on.ca/Physicians/Your-Practice/Registration-Renewals-and-Incorporation/Incorporation-Issuance-and-Renewal/Frequently-Asked-Questions-about-Incorporation>.
[4] CPSO, “Incorporation Issuance and Renewal” (2025) < https://www.cpso.on.ca/Physicians/Your-Practice/Registration-Renewals-and-Incorporation/Incorporation-Issuance-and-Renewal>.