The Incorporation of Your Dental Practice
Part 3 of 4: Important Formalities
By Pierre de Boucherville
Creating a business corporation is one thing … But what are the consequences?
Beware! A dentist who changes his status from being a self-employed person operating a dental clinic (or a new graduate, or an associate dentist leaving a clinic to found a new one) to a shareholder of a corporation must report the change to all the stakeholders.
First of all, your professional supervisory body: the Ordre des dentistes du Québec (Order of Quebec Dentists, although the name is not translated in the English pages of their website).
Plan ahead: your activities under the name of your company must start on a specific date, which will be determined by the Ordre!
You will need to send to the Ordre des dentistes the INITIAL DECLARATION, a form (10 pages) which states that you are incorporating, accompanied by supporting documents (CERTIFIED copies, either by the issuing authority or by a LAWYER or a notary), and a fee of $100.
If your application is accepted, the Ordre des dentistes will send you a confirmation NOTICE. However, the Ordre says that a processing period of up to THREE (3) WEEKS OR MORE, depending on the circumstances, is required FOR ANY DOCUMENT SUBMITTED.
You must consider the DESIRED start date of your activities through your company: the official date will be the receipt date of your request by the Ordre should it suits you and everything is compliant. However you may request a later date in your application form, for tax planning purposes.
Finally, the Ordre des dentistes recalls that: “Any error or omission could result in a delay in the processing of the application as well as failure to obtain the requested starting date.”
So you have to plan the maneuver!
PS: do not forget that you will have to submit an annual declaration fee ($ 100) to the Ordre des dentistes even if no changes have occurred in your practice!
Regarding your professional liability insurer: there is some good news!
The Ordre des dentistes, through its professional liability insurance fund or FARPODQ, assures you for your professional practice, up to a maximum coverage of $2,000,000 per claim.
The Ordre will send a copy of your declaration to FARPODQ, so the latter does not have to be notified.
Your other insurers
Remember that property belonging to your company must be insured on its behalf, as opposed to yours, personally… because a corporation is a separate legal entity, and an insurance policy covering civil liability and damages on your corporate clinic may be (and is most likely) required by your landlord. Notify your insurers as soon as possible of you’re the existence of the new corporation. Do not let them have the chance to reject any claim because the contract does not protect the right person!
Bank accounts, lines of credit and other financial instruments must be established in the name of your company. Some loans can be transferred. Personal guarantees may be required or amended. Do not forget that banks sometimes take time to complete some processes.
Needless to say that your accountant should be aware … otherwise there will likely be adjustments to your financial statements to be made, which will result in costs that could easily be avoided.
The registration of your company must be done with the various authorities with respect of: deductions at source as an employer, various taxes (sales, business), etc.
You should inform them that you will continue to serve them, but your fees will be payable to your company.
Dental equipment or furniture suppliers, your building owner… All must issue invoices on behalf of your new company. As for the lease, a transfer and other major changes may need to be negotiated.
Do not wait too long to think about it, because each lease includes a clause requiring the landlord prior approval before making a tenant change!
The hands that feed you
Private insurers and RAMQ, who pay a large part of your fees, must be contacted in order to register your company in their systems and benefit from their computerized services. Avoid liquidity issues and inform them as soon as possible.
Advertising and Marketing
Your business cards, letterhead, newspaper advertisements (especially if you have a long-term contract), website, Facebook page, LinkedIn page, Twitter account, registration to various clubs … must reflect the new existence of your business corporation.
All this gives you headaches? Let us help!
DISCLAIMER : Please note that the information contained in our articles does NOT constitute legal advice. It is provided for educational purposes only. Laws are subject to change without notice. The content of our articles may be outdated. If you need legal advice ore representation, please contact Pierre de Boucherville.