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The Professional Corporations (Various Acts Amendment) Act

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If you need an official copy, contact Statutory Publications.

S.M. 1999, c. 41

THE PROFESSIONAL CORPORATIONS (VARIOUS ACTS AMENDMENT) ACT


 

(Assented to July 14, 1999)

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:

PART 1

THE CERTIFIED GENERAL ACCOUNTANTS ACT

C.C.S.M. c. C46 amended

1         The Certified General Accountants Act is amended by this Part.

2         Section 1 is amended by adding the following definitions in alphabetical order:

"permit" means a document issued under subsection 11.3(1) certifying that the corporation named in the document is authorized to provide professional services in the province for the period specified in the document; (« permis »)

"professional corporation" means a corporation holding a valid permit; (« cabinet de comptables »)

"professional services" means public accounting services. (« services professionnels »)

3         Subsection 6(1) is amended

(a) in clause (i), by adding "and of professional corporations" at the end;

(b) by adding the following after clause (p):

(p.1) regulating and governing the provision of professional services by professional corporations, including by-laws

(i) respecting the application for and the issuance, expiry and renewal of permits, and providing for conditions that must be met before a permit may be issued or renewed,

(ii) setting the fees payable on application for a permit or renewal of a permit,

(iii) respecting notification of changes required under section 11.7,

(iv) prescribing conditions or restrictions that may be imposed on permits,

(v) respecting procedures for the issuance, renewal, suspension or cancellation of permits, or the imposition of conditions or restrictions on permits,

(vi) respecting names by which professional corporations or partnerships referred to in section 11.2 may be known or under which they may provide professional services;

(c) in clause (ee), by striking out "or firm of members" and substituting ", a professional corporation or a firm of members, professional corporations or any combination thereof"; and

(d) in clauses (gg), (hh) and (ii), by adding "and professional corporations" after "members".

4(1)      Subsection 9(1) is amended by striking out "No person" and substituting "Subject to section 11.2 and subsection 11.3(1), no person".

4(2)      Subsection 9(4) is amended by striking out everything after "offence".

4(3) The following is added after subsection 9(4):

Directors, officers and employees

9(4.1)    If a corporation commits an offence under this section, a director, officer or employee of the corporation who authorized, permitted or acquiesced in the commission of the offence is also guilty of an offence, whether or not the corporation has been prosecuted or convicted.

Penalty

9(4.2)    A person who is guilty of an offence under this section is liable, on summary conviction,

(a) for a first offence, to a fine of not more than $6,000.; and

(b) for a second or subsequent offence, to a fine of not more than $30,000.

Disposition of fines

9(4.3)    Any fine imposed under this section shall be paid to the Minister of Finance.

Prosecution of offence

9(4.4)    Any person may be a prosecutor in the prosecution of an offence under this section, and the government may pay to the prosecutor a portion of any fine recovered, in an amount that it considers appropriate, toward the costs of the prosecution.

4(4)      Subsection 9(5) is amended

(a) in the section heading, by adding "or permit" after "Certificate" in the English version; and

(b) in the subsection, by striking out ", the certificate" and substituting "or a permit to a corporation, the certificate or permit".

4(5)      Subsection 9(6) is repealed and the following is substituted.

Return of certificate or permit

9(6)      A member who is directed by the board to surrender his or her certificate or a permit issued to a corporation of which he or she is a director or officer shall forthwith deliver the certificate or permit to the secretary.

4(6) Subsection 9(7) is amended

(a) by striking out "(5)" and substituting "(6)"; and

(b) by striking out "injuction" in the English version and substituting "injunction".

5(1)      Subsection 11(1) is repealed and the following is substituted:

Registers

11(1)     The secretary shall establish and maintain

(a) a register of members; and

(b) a register of corporations that have been issued permits.

5(2)      The section heading for subsection 11(2) is amended by adding "of members" at the end.

5(3)      The following is added after subsection 11(2):

Entry in register of corporations

11(2.1)   An entry in the registry of corporations under subsection (1) shall include

(a) the name and business address of the corporation;

(b) the names of the voting shareholders, the directors and the president of the corporation;

(c) any practice restrictions or other conditions imposed on the corporation's permit;

(d) a notation of each suspension or cancellation of the corporation's permit;

(e) where applicable, the name of the custodian appointed under subsection 12(7); and

(f) any other information that the by-laws require to be kept in the register.

5(4)      Subsection 11(3) is amended by adding "of members" after "register".

5(5)      Subsection 11(5) is amended by striking out "The register of members" and substituting "Each register".

6         The following is added after section 11:

Definitions

11.1      In this section and sections 11.2 to 11.9,

"member" means, unless the context otherwise requires, a member of the association in good standing; (« membre »)

"voting share", in relation to a corporation, means a share of its capital stock that entitles the holder to vote in any election of directors of the corporation; (« action avec droit de vote »)

"voting shareholder", in relation to a corporation, means a person who owns a voting share of the corporation or is a voting shareholder of another corporation that owns a voting share of the corporation. (« actionnaire avec droit de vote »)

Professional corporation may provide professional services

11.2      A professional corporation may, through one or more members, provide professional services

(a) under its own name; or

(b) as a member of a general partnership of professional corporations or of professional corporations and members, under a name approved by the secretary in accordance with the by-laws.

Corporate permit

11.3(1)   Subject to subsection (2), the secretary shall issue a permit or a renewal of a permit to a corporation if he or she is satisfied that

(a) the corporation is incorporated, formed by amalgamation or continued under The Corporations Act and is in good standing under that Act;

(b) the name of the corporation includes the words "certified general accountant" or "certified general accountants" or the initials "C.G.A.";

(c) each voting share of the corporation is legally and beneficially owned by a member or a professional corporation;

(d) each other share in the capital stock of the corporation is both legally and beneficially owned by

(i) a person who is a voting shareholder of the corporation or a spouse or child, within the meaning of section 252 of the Income Tax Act (Canada), of a voting shareholder of the corporation, or

(ii) a corporation each share of the capital stock of which is legally and beneficially owned by a person referred to in subclause (i);

(e) each director of the corporation is a member;

(f) the president of the corporation is a member;

(g) each person through whom the corporation will be providing professional services is

(i) a member, or

(ii) an employee acting under the supervision of a member through whom the corporation will be providing professional services;

(h) the corporation has filed an application, in the form prescribed by the board, and paid the fee prescribed by the board, for the permit or renewal of the permit; and

(i) all other requirements prescribed by the board for the issuance or renewal of the permit have been satisfied.

Refusal to issue or renew permit

11.3(2)   The secretary

(a) shall refuse to issue a permit to, or to renew the permit of, a corporation if the secretary is not satisfied by proper evidence that the corporation is eligible for the permit; and

(b) may refuse to issue a permit to, or to renew the permit of, a corporation if

(i) a permit issued to the corporation under this Act has been cancelled, or

(ii) a director, officer or shareholder of the corporation is or has been a director, officer or shareholder of a corporation whose permit under this Act has been cancelled.

Notice of refusal

11.3(3)   When the secretary refuses to issue or renew a permit under subsection (2), the secretary shall inform the corporation in writing of his or her decision and the reasons for the decision.

Appeal to board

11.3(4)   A corporation that is refused a permit or renewal of a permit under subsection (2) may appeal the secretary's decision to the board, which may confirm or vary the decision of the secretary.

Validity of permit

11.4      Unless it is cancelled, surrendered or under a suspension, a permit is valid for the period specified in the permit.

Business without permit prohibited

11.5(1)   A corporation whose name contains "certified general accountant", "certified general accountants" or the initials "C.G.A." shall not carry on any business in the province unless it holds a valid permit.

Restriction on business of professional corporation

11.5(2)   A professional corporation shall not carry on any business or activity other than the provision of professional services authorized by the permit and the provision of other services directly associated with the provision of those services.

Interpretation of business restriction

11.5(3)   Subsections (1) and (2) shall not be construed so as to prohibit a corporation from investing its own funds in real property, other than for development purposes, or in stocks, mutual funds, debt obligations, insurance, term deposits or similar investments.

Validity of corporate act

11.5(4)   No act of a corporation, including a transfer of property to or by the corporation, is invalid merely because it contravenes subsection (1) or (2).

Voting agreements void

11.6(1)   An agreement or proxy that vests in a person who is not a member the authority to exercise any voting right attached to a share of a professional corporation is void.

Unanimous shareholders' agreements void

11.6(2)   A unanimous shareholders' agreement within the meaning of subsection 140(2) of The Corporations Act in respect of a professional corporation is void unless each shareholder of the corporation is a member or a professional corporation.

Notification of changes

11.7      Every professional corporation shall notify the secretary, within the time and in a form and manner prescribed by the board, of every change in the voting shareholders, the other shareholders, the directors or the president of the corporation.

Application of Act and rules

11.8(1)   This Act and the by-laws apply to a member despite any relationship he or she may have with a professional corporation.

Obligations to clients not diminished

11.8(2)   The fiduciary and ethical obligations of a member, and the obligations of a member respecting confidentiality, to a person receiving professional services

(a) are not diminished by the fact that the services are provided on behalf of a corporation; and

(b) apply equally to a corporation on whose behalf the services are provided and to its directors, officers and shareholders.

Liability of member

11.8(3)   The liability of a member for a professional liability claim is not affected by the fact that the member is providing professional services on behalf of a corporation.

Liability of voting shareholders

11.8(4)   A person is jointly and severally liable with a professional corporation, or a corporation acting in contravention of subsection 11.5(1), for all professional liability claims made against the corporation in respect of errors or omissions that were made or occurred while the person was a voting shareholder of the corporation.

Effect of member's conduct on professional corporation

11.8(5)   If the conduct of a member through whom a professional corporation was providing professional services at the time the conduct occurred is the subject of an investigation or inquiry,

(a) any power that may be exercised in respect of the member may be exercised in respect of the corporation; and

(b) the corporation is jointly and severally liable with the member for all fines and costs the member is ordered to pay.

Member's practice restrictions apply to corporation

11.8(6)   Any restriction imposed on the practice of a member through whom a professional corporation provides professional services applies to the permit of the corporation in relation to its provision of professional services through that member.

Grounds for suspension or cancellation of permit

11.9(1)   Subject to subsection (2), a corporation's permit may be cancelled or suspended by the board if

(a) the corporation ceases to meet any of the requirements set out or referred to in subsection 11.3(1);

(b) the corporation contravenes any provision of this Act or the by-laws of the association; or

(c) a member, in the course of providing professional services on behalf of the corporation, does or fails to do anything as a result of which he or she ceases to be a member in good standing.

Limitation

11.9(2)   A professional corporation's permit shall not be cancelled or suspended by reason only of the fact that

(a) one or more shares of the corporation have vested in

(i) an executor or administrator of the estate of an individual as a consequence of the death of the individual, or

(ii) a trustee in bankruptcy on the bankruptcy of the owner of the shares,

`   unless the individual or owner was the only member through whom the corporation was providing professional services or the shares continue to be vested in the executor, administrator or trustee for a period of 180 days or any longer period allowed by the board;

(b) a share continues, after a divorce, to be held by the former spouse of a voting shareholder of the corporation;

(c) a member's right to practise has been temporarily suspended, unless

(i) the member remains a director or officer of the corporation more than 14 days after the commencement of the suspension, or

(ii) the corporation is not providing professional services through any other member; or

(d) an individual has ceased to be a member, for any reason other than the death or bankruptcy of the individual, unless

(i) the individual remains a director or officer of the corporation more than 14 days after ceasing to be a member,

(ii) the individual remains a voting shareholder of the corporation more for than 90 days after ceasing to be a member, or for any longer period allowed by the board, or

(iii) the corporation is not providing professional services through any other member.

Alternative to cancellation or suspension

11.9(3)   Instead of suspending or cancelling the permit of a professional corporation, the board may do one or more of the following:

(a) reprimand the corporation or one or more directors or voting shareholders of the corporation;

(b) impose restrictions on the permit;

(c) impose a fine on the corporation, payable to the association, in an amount not exceeding $10,000.

7         Subsection 12(7) is amended by adding "or of a corporation on whose behalf the member is practising," after "member".

8         Subsection 13(6) is amended by striking out "committe" in the English version and substituting "committee".

PART 2

THE CHARTERED ACCOUNTANTS ACT

C.C.S.M. c. C70 amended

9 The Chartered Accountants Act is amended by this Part.

10        The following is added after section 1:

Definitions

1.1       In this Act,

"permit" means a certificate issued under subsection 28(1) certifying that the corporation named in the certificate is authorized to provide professional services in the province for the period specified in the certificate; (« permis »)

"professional corporation" means a corporation holding a valid permit; (« cabinet de comptables »)

"professional services" means public accounting services; (« services professionnels »)

11        Clauses 2(e) and (f) are amended by striking out "and students in accounts" and substituting ", its students in accounts and professional corporations";

12(1)     Subsection 8(1) is amended by striking out "and students in accounts" and substituting ", its students in accounts and professional corporations".

12(2)     Subsection 8(2) is repealed and the following is substituted:

Further by-laws

8(2)      Without limiting the generality of subsection (1), the council may make by-laws

(a) prescribing rules of professional conduct of the members and students in accounts of the institute;

(b) providing for the discipline by the institute of

(i) the members and students in accounts of the institute, and

(ii) professional corporations;

(c) providing for the recurring review by the institute of the professional practices of its members and of professional corporations;

(d) respecting the provision and maintenance of professional liability insurance for members of the institute and for professional corporations;

(e) respecting the practice of public accounting by members of the institute through professional corporations, including by-laws

(i) respecting the application for and the issuance, expiry and renewal of permits, including conditions that must be met before a permit may be issued or renewed,

(ii) setting the fees payable on application for a permit or renewal of a permit,

(iii) respecting notification of changes required under section 32,

(iv) prescribing conditions or restrictions that may be imposed on permits,

(v) prescribing procedures for the issuance, renewal, suspension or cancellation of permits, or the imposition of conditions or restrictions on permits,

(vi) respecting names by which professional corporations or partnerships referred to in section 27 may be known or under which they may provide professional services.

13        Subsection 20(1) is amended

(a) in the part preceding clause (a), by adding "or against a professional corporation" after "institute"; and

(b) in the part following clause (c), by striking out everything after "by order" and substituting the following:

(d) expel or suspend the member or student;

(e) suspend or cancel the permit of the corporation; or

(f) reprimand, impose a fine on or impose conditions on the provision of professional services by, the member, student or corporation.

14(1)     Subsection 21(1) is amended by adding ", section 27 and clause 28(1)(b)" after "(3)".

14(2)     Subsection 21(2) is amended

(a) by striking out ", subject to subsection (3),"; and

(b) by striking out "The Institute of Chartered Accountants of Manitoba" and substituting "the institute or is a professional corporation".

14(3)     Subsection 21(3) is repealed and the following is substituted:

Ceasing to be a partner

21(3)     If at any time the only member of a firm referred to in subsection (2) who is a member of the institute or a professional corporation ceases to be a member of the firm, the firm may continue to use the designations referred to in subsection (2) for up to six months after that time.

14(4)     The following is added after subsection 21(3):

Directors, officers and employees

21(4)     If a corporation commits an offence under this section, a director, officer or employee of the corporation who authorized, permitted or acquiesced in the commission of the offence is also guilty of an offence, whether or not the corporation has been prosecuted or convicted.

15        Section 22 is repealed and the following is substituted:

Penalty

22(1)     A person who contravenes section 21 is guilty of an offence and is liable, on summary conviction,

(a) for a first offence, to a fine of not more than $6,000.; and

(b) for each subsequent offence, to a fine of not more than $30,000.

Disposition of fines

22(2)     Any fine or penalty imposed under (1) shall be paid to the Minister of Finance.

Prosecution of offence

22(3)     Any person may be a prosecutor in the prosecution of an offence under this section, and the government may pay to the prosecutor a portion of any fine recovered, in an amount that it considers appropriate, toward the costs of the prosecution.

16        Section 23 is repealed.

17        Section 24 is repealed and the following is substituted:

Registers

24(1)     The council shall cause to be kept by the secretary a register of members of the institute and a register of corporations that have been issued permits under section 28.

Entry in register of members

24(2)     An entry in the register of members shall include

(a) the name and business address of the member;

(b) where applicable, the name and registered address of the professional corporation of the member;

(c) the standing of the member;

(d) a notation of any disciplinary restrictions, limitations or conditions to which the member is subject; and

(e) any other information that the by-laws require to be kept in the register.

Entry in register of corporations

24(3)     An entry in the register of corporations shall include

(a) the name and business address of the corporation;

(b) the names of the voting shareholders, the directors and the president of the corporation;

(c) any practice restrictions or other conditions imposed on the corporation's permit;

(d) a notation of each suspension or cancellation of the corporation's permit;

(e) any other information that the by-laws require to be kept in the register.

Membership privileges

24(4)     Only those individuals whose names are entered in the register of members are entitled to the privileges of membership in the institute.

Incorrect entries

24(5)     An entry in a register proved to the satisfaction of the council to have been incorrectly or erroneously made may be amended or deleted from the register by order of the council.

Certificate of secretary as evidence

24(6)     A certificate signed by the secretary under the seal of the institute certifying that any thing is or is not recorded in a register is admissible in evidence as prima facie proof of the matter certified, without proof of the signature or appointment of the secretary or of the seal of the institute.

Inspection of register

24(7)      Each register shall be open to inspection by any person during reasonable business hours.

18        The following is added after section 25:

PROFESSIONAL CORPORATIONS

Definitions

26        In this section and sections 27 to 34,

"member" means, unless the context otherwise requires, a member of the institute in good standing and registered as such; (« membre »)

"membership committee" means the membership committee of the council appointed by the council in accordance with the by-laws; (« comité des membres »)

"voting share", in relation to a corporation, means a share of its capital stock that entitles the holder to vote in any election of directors of the corporation; (« action avec droit de vote »)

"voting shareholder", in relation to a corporation, means a person who owns a voting share of the corporation or is a voting shareholder of another corporation that owns a voting share of the corporation. (« actionnaire avec droit de vote »)

Professional corporation may provide professional services

27        A professional corporation may provide professional services through one or more members

(a) under its own name;

(b) as a member of a general partnership of professional corporations, or of professional corporations and members, under a name approved by the membership committee in accordance with the by-laws; or

(c) as a member of a firm referred to in subsection 21(2).

Corporate permit

28(1)     Subject to subsection (2), the membership committee shall issue a permit or a renewal of a permit to a corporation if the committee is satisfied that

(a) the corporation is incorporated, formed by amalgamation or continued under The Corporations Act and is in good standing under that Act;

(b) the name of the corporation includes the words "chartered accountant" or "chartered accountants";

(c) each voting share of the corporation is legally and beneficially owned by a member or a professional corporation;

(d) each other share in the capital stock of the corporation is both legally and beneficially owned by

(i) a person who is a voting shareholder of the corporation or a spouse or child, within the meaning of section 252 of the Income Tax Act (Canada), of a voting shareholder of the corporation, or

(ii) a corporation each share of the capital stock of which is legally and beneficially owned by a person referred to in subclause (i);

(e) each director of the corporation is a member;

(f) the president of the corporation is a member;

(g) each person through whom the corporation will be providing professional services is

(i) a member, or

(ii) an employee acting under the supervision of a member through whom the corporation will be providing professional services;

(h) the corporation has filed an application, in the form prescribed by the council, and paid the fee prescribed by the council, for the permit or renewal of the permit; and

(i) all other requirements prescribed by the council for the issuance or renewal of the permit have been satisfied.

Refusal to issue or renew permit

28(2)     The membership committee

(a) shall refuse to issue a permit to, or to renew the permit of, a corporation if the committee is not satisfied by proper evidence that the corporation is eligible for the permit; and

(b) may refuse to issue a permit to, or to renew the permit of, a corporation if

(i) a permit issued to the corporation under this Act has been cancelled, or

(ii) a director, officer or shareholder of the corporation is or has been a director, officer or shareholder of a corporation whose permit under this Act has been cancelled.

Notice of refusal

28(3)     When the membership committee refuses to issue or renew a permit under subsection (2), the committee shall notify the corporation in writing of the decision and the reasons for the decision.

Appeal to council

28(4)     A corporation that is refused a permit or renewal of a permit under subsection (2) may appeal the membership comittee's decision to the council, which may confirm or vary the decision of the committee.

Validity of permit

29         Unless it is cancelled, surrendered or under a suspension, a permit is valid for the period specified in the permit.

Business without permit prohibited

30(1)     A corporation whose name contains the words "chartered accountant" or "chartered accountants" shall not carry on any business in the province unless it holds a valid permit.

Restriction on business of professional corporation

30(2)     A professional corporation shall not carry on any business or activity other than the provision of professional services authorized by the permit and the provision of other services directly associated with the provision of those services.

Interpretation of business restriction

30(3)     Subsections (1) and (2) shall not be construed so as to prohibit a professional corporation from investing its own funds in real property, other than for development purposes, or in stocks, mutual funds, debt obligations, insurance, term deposits or similar investments.

Validity of corporate act

30(4)     No act of a corporation, including a transfer of property to or by the corporation, is invalid merely because it contravenes subsection (1) or (2).

Voting agreements void

31(1)     An agreement or proxy that vests in a person who is not a member the authority to exercise any voting right attached to a share of a professional corporation is void.

Unanimous shareholders' agreements void

31(2)     A unanimous shareholders' agreement within the meaning of subsection 140(2) of The Corporations Act in respect of a professional corporation is void unless each shareholder of the corporation is a member or a professional corporation.

Notification of changes

32        Every professional corporation shall notify the secretary, within the time and in a form and manner prescribed by the council, of every change in the voting shareholders, the other shareholders, the directors or the president of the corporation.

Application of Act and by-laws

33(1)     This Act and the by-laws of the institute apply to a member despite any relationship he or she may have with a professional corporation.

Obligations to clients not diminished

33(2)     The fiduciary and ethical obligations of a member, and the obligations of a member respecting confidentiality, to a person receiving professional services

(a) are not diminished by the fact that the services are provided on behalf of a corporation; and

(b) apply equally to a corporation on whose behalf the services are provided and to its directors, officers and shareholders.

Liability of member

33(3)     The liability of a member for a professional liability claim is not affected by the fact that the member is providing professional services on behalf of a corporation.

Liability of voting shareholders

33(4)     A person is jointly and severally liable with a professional corporation, or a corporation acting in contravention of subsection 30(1), for all professional liability claims made against the corporation in respect of errors or omissions that were made or occurred while the person was a voting shareholder of the corporation.

Effect of member's conduct on professional corporation

33(5)     If the conduct of a member through whom a professional corporation was providing professional services at the time the conduct occurred is the subject of an investigation or inquiry,

(a) any power that may be exercised under this Act in respect of the member may be exercised in respect of the corporation; and

(b) the corporation is jointly and severally liable with the member for all fines and costs the member is ordered to pay.

Member's practice restrictions apply to corporation

33(6)     Any restriction imposed on the practice of a member through whom a professional corporation provides professional services applies to the permit of the corporation in relation to its provision of professional services through that member.

Grounds for suspension or cancellation of permit

34(1)     Subject to subsection (2), a corporation's permit may be cancelled or suspended by the council, or by a committee of the council, if

(a) the corporation ceases to meet any of the requirements set out or referred to in subsection 28(1);

(b) the corporation contravenes any provision of this Act or the by-laws of the institute; or

(c) a member, in the course of providing professional services on behalf of the corporation, does or fails to do anything as a result of which he or she ceases to be a member in good standing.

Limitation

34(2)     A professional corporation's permit shall not be cancelled or suspended by reason only of the fact that

(a) one or more shares of the corporation have vested in

(i) an executor or administrator of the estate of an individual as a consequence of the death of the individual, or

(ii) a trustee in bankruptcy on the bankruptcy of the owner of the shares,

unless the individual or owner was the only member through whom the corporation was providing professional services or the shares continue to be held by the executor, administrator or trustee for a period of 180 days or any longer period allowed by the council;

(b) a share continues, after a divorce, to be held by the former spouse of a voting shareholder of the corporation;

(c) a member's right to practise has been temporarily suspended, unless

(i) the member remains a director or officer of the corporation more than 14 days after the commencement of the suspension, or

(ii) the corporation is not providing professional services through any other member; or

(d) an individual has ceased to be a member, for any reason other than the death or bankruptcy of the individual, unless

(i) the individual remains a director or officer of the corporation more than 14 days after ceasing to be a member,

(ii) the individual remains a voting shareholder of the corporation for more than 90 days after ceasing to be a member, or for any longer period allowed by the council, or

(iii) the corporation is not providing professional services through any other member.

Alternative to cancellation or suspension

34(3)     Instead of suspending or cancelling the permit of a professional corporation, the council or committee of the council may do one or more of the following:

(a) reprimand the corporation or one or more directors or voting shareholders of the corporation;

(b) impose restrictions on the permit;

(c) impose a fine on the corporation, payable to the institute, in an amount not exceeding $10,000.

PART 3

THE DENTAL ASSOCIATION ACT

C.C.S.M. c. D30 amended

19        The Dental Association Act is amended by this Part.

20        Section 1 is amended

(a) in the definition "dentist", by striking out "a person registered and licensed under this Act" and substituting "an individual qualified to practise dentistry";

(b) in the definition "technician", by striking out "registered dentist" and substituting "licensed member"; and

(c) by adding the following definitions in alphabetical order:

"dental corporation" means a corporation holding a valid permit; (« cabinet de dentistes »)

"licence" means a certificate issued by the registrar under subsection 15(2) indicating that the individual named in the certificate is authorized to practise dentistry in the province for the period specified in the certificate; (« licence »)

"licensed" means holding a licence or permit that has not expired, is not currently suspended and has not been surrendered or cancelled; (« autorisé »)

"member", unless the context otherwise requires, means an individual who is registered on the Manitoba Dental Register established under section 10; (« membre »)

"permit" means a certificate issued by the registrar under subsection 23.3(1) indicating that the corporation named in the certificate is authorized to practise dentistry in the province for the period specified in the certificate; (« permis »)

21(1)     The following is added after subsection 2(1):

Unauthorized practice

2(1.1)    Except as otherwise provided in subsections (2) to (4), no person other than a licensed member or dental corporation shall for hire, gain, or hope of reward practise or profess to practise dentistry in the province, and a licensed member or dental corporation shall practise dentistry in the province only as authorized by or under this Act, the rules of the association and the member's licence or the corporation's permit.

Practice for unauthorized persons

2(1.2)    No member shall, as employee, assistant, agent, partner, shareholder or otherwise, practise dentistry under the express or implied control of, or for the benefit, profit or advantage of, any person other than a licensed member or a dental corporation.

Unlicensed and unregistered person not to act as proprietor, etc., in office of dentist

2(1.3)    No person who is not a licensed member or a dental corporation shall

(a) use the word "dentist", or other letters or titles in connection with the person's name that in any way would represent the person as being engaged in the practise of dentistry;

(b) by sign or circular, pamphlet, newspaper, or in any way whatsoever, advertise or indicate or authorize or knowingly permit it to be advertised or indicated that the person does or will, directly or through the person's servant, agent or employee, practise dentistry; or

(c) manage or operate as proprietor, owner, or otherwise a place where dentistry is practised or dental operations are performed.

Employment permitted

2(1.4)    This section shall not be construed so as to prohibit a licensed member or dental corporation from

(a) employing a person who is not licensed member to manage the member's or corporation's office; or

(b) renting office space, equipment or services from a person who is not a licensed member or a dental corporation.

Entitlement to payment

2(1.5)    No person is entitled to recover in any court of law payment for any professional services rendered by the person, or an employee of the person, as a dentist unless the person was licensed at the time the services were rendered.

21(2)     Subsection 2(2) is repealed and the following is substituted:

Exceptions

2(2)      Subject to any rules made under clause 9(1)(i), nothing in this Act prohibits

(a) an employee of a licensed member or of a dental corporation from practising dentistry in the office of the member or dental corporation and under the effective supervision and control of a licensed member; or

(b) a dental auxiliary, at the request of a licensed member or dental corporation and under the effective supervision and control of a licensed member, from performing duties or functions for which the dental auxiliary has been formally trained.

21(3)     Subsection 2(5) is repealed and the following is substituted:

Responsibility of dentist

2(5)      A dentist under whose supervision or control an employee or dental auxiliary performs any service, does any work or makes any thing referred to in subsection (1) for any person shall be as fully responsible to that person as if such service or work or thing had been performed or done or made by the dentist.

22        Section 4 is amended by striking out "person" and substituting "individual".

23(1)     Subsection 6(3) is amended by striking out "he is registered and licensed under this Act and" and substituting "he or she is a licensed member who".

23(2)      Subsection 6(5) is amended

(a) by striking out "Only members" and substituting "Only licensed members";

(b) by striking out "each such member" and substituting "each licensed member"; and

(c) by striking out "voting" in the English version and substituting "licensed".

23(3)     Subsection 6(6) is repealed and the following is substituted:

Candidates

6(6)      Any licensed member of the association in good standing is eligible for nomination and election as a member of the board to represent the electoral district in which he or she practises.

23(4)     Subsection 6(7) is amended by striking out "of the association shall be deemed to practise in the place where his" and substituting "is deemed to practise in the place where his or her".

24(1)     Subsection 9(1) is amended

(a) in clause (a), by striking out "of the association" and substituting "and dental corporations";

(b) in clause (b), by adding "or dental corporation" after "member";

(c) in clause (d) of the English version, by striking out "of the association" and substituting "or dental corporation"; and

(d) by repealing clause (f) and substituting the following:

(f) suspend the licence or permit of any member or dental corporation, and strike from the Manitoba Dental Register the name of any member, for the non-payment of any fee or penalty due under this Act or the rules of the association, and prescribe or impose terms for the reinstatement of such licences, permits or members;

24(2)     Subsection 9(2) is amended

(a) by repealing clause (b) and substituting the following:

(a.1) the establishment of different classes of membership, the qualifications for membership in each class, and the rights, privileges, restrictions and conditions attaching to each class;

(b) the fees to be paid by members, corporations and others to the association, including fees to be paid by applicants upon registration, the fees for annual licences or permits to practise, and if deemed advisable designating different fees for different classes of registration, licences or permits;

(b) by repealing clause (j) and substituting the following:

(j) the maintenance and the keeping of the Manitoba Dental Register and the dental corporations register established under section 10;

(k) the regulation of the practise of dentistry by dental corporations including, without limitation, rules

(i) respecting the application for, issuance, expiry and renewal of permits, including conditions that must be met before a permit may be issued or renewed and setting the fees for the issuance or renewal of permits,

(ii) respecting notification of changes required under section 23.7,

(iii) prescribing conditions or restrictions that may be imposed on licenses,

(iv) respecting procedures for the issuance, renewal, suspension or cancellation of permits, or the imposition of restrictions on permits,

(v) respecting names by which dental corporations or partnerships referred to in section 23.2 may be known or under which they may practice;

(l) requirements relating to the professional liability coverage, or other liability protection, that a licensed member or dental corporation must carry.

25        Section 10 and the centred heading before it are repealed and the following is substituted:

REGISTERS

Registers

10(1)     The registrar shall maintain the following registers:

(a) the Manitoba Dental Register, on which shall be registered the names and qualifications of the individuals registered under section 15 or any former Act referred to in section 4; and

(b) the dental corporations register, on which shall be registered the names of corporations that have been issued permits under section 23.3.

Information in registers

10(2)     Each register shall include

(a) the business address and business telephone number of the registered person;

(b) any practice restrictions or other conditions imposed on the registered person's licence or permit;

(c) a notation of every suspension or cancellation of registration or of a licence or permit;

(d) in the case of the Manitoba Dental Register, the result of every disciplinary proceeding in which a panel has made a finding under section 27.5; and

(e) any other information prescribed by the rules of the association.

Incorrect entries

10(3)     An entry in a register proved to the satisfaction of the board to have been incorrectly or erroneously made may be amended or deleted from the register by order of the board.

Certificate of registrar as evidence

10(4)     A certificate signed by the registrar under the seal of the association certifying that any thing is or is not recorded in a register is admissible in evidence as prima facie proof of the matter certified without proof of the signature or appointment of the registrar or of the seal of the association.

26        Section 11 is repealed.

27        Section 12 is amended by striking out "The register" and substituting "Each register".

28        The following centred heading is added after section 12:

REGISTRATION AND LICENSING OF MEMBERS

29(1)     Subsection 13(1) is amended by striking out "under this Act" and substituting "on the Manitoba Dental Register".

29(2)     Subsection 13(3) is repealed and the following is substituted:

Examinations required before registration

13(3)     Except as otherwise provided in this Act, every individual, before being registered on the Manitoba Dental Register,

(a) shall be required to pass an examination or examinations in a subject or subjects specified from time to time by the senate; and

(b) may be required to perform clinical treatement and procedures before the examiners.

30(1)     Subsection 14(1) is repealed.

30(2)     Subsection 14(2) is amended

(a) in the part preceding clause (a), by striking out "the granting to the holder of thereof a license to practise dentistry in the province, if the certificate is accompanied by evidence that the applicant is of good moral character and that he" and substituting "registration of the holder on the Manitoba Dental Register, if the certificate is accompanied by evidence satisfactory to the board that the applicant is of good moral character and that he or she"; and

(b) in the part following clause (b), by striking out "holders" and substituting "applicant's".

31(1)     Subsection 15(1) is repealed and the following is substituted:

Eligibility for registration

15(1)     Every individual who meets the qualifications for registration under this Act is entitled, upon application to the registrar, payment of the prescribed fee and providing to the registrar evidence satisfactory to the registrar of his or her qualifications, to be registered on the Manitoba Dental Register and to have particulars of his or her qualifications entered on the register.

31(2)     Subsection 15(2) is amended by striking out "and thereafter upon paying the fees for an annual licence" and substituting ", and thereafter upon paying the fees for an annual licence and providing evidence satisfactory to the registrar of having met any continuing education requirements prescribed under clause 9(1)(k),".

32        Subsection 16(1) is amended by striking out "register" and substituting "Manitoba Dental Register".

33        Section 18 is repealed.

34        Sections 20 to 23 are repealed.

35        The following is added after section 23:

PROFESSIONAL CORPORATIONS

Definitions

23.1      In this section and sections 23.2 to 23.9,

"voting share", in relation to a corporation, means a share of its capital stock that entitles the holder to vote in any election of directors of the corporation; (« action avec droit de vote »)

"voting shareholder", in relation to a corporation, means a person who owns a voting share of the corporation or is a voting shareholder of another corporation that owns a voting share of the corporation. (« actionnaire avec droit de vote »)

Dental corporation may practise

23.2      A dental corporation may practise dentistry through one or more licensed members

(a) under its own name; or

(b) under a name approved by the registrar in accordance with the by-laws of the association, as a member of a general partnership of dental corporations or of dental corporations and licensed members.

Corporate permit

23.3(1)   Subject to subsection (2), the registrar shall issue a permit or a renewal of a permit to a corporation if he or she is satisfied that

(a) the corporation is incorporated, formed by amalgamation or continued under The Corporations Act and is in good standing under that Act;

(b) the name of the corporation includes the words "dental corporation";

(c) each voting share of the corporation is legally and beneficially owned by a licensed member or a dental corporation;

(d) each other share in the capital stock of the corporation is both legally and beneficially owned by

(i) a person who is a voting shareholder of the corporation or a spouse or child, within the meaning of section 252 of the Income Tax Act (Canada), of a voting shareholder of the corporation, or

(ii) a corporation each share of the capital stock of which is legally and beneficially owned by a person referred to in subclause (i);

(e) each director of the corporation is a licensed member;

(f) the president of the corporation is a licensed member;

(g) each person through whom the corporation will be practising dentistry is

(i) a licensed member, or

(ii) an employee or dental auxiliary acting under the effective supervision and control of a licensed member through whom the corporation will be practising dentistry;

(h) the corporation has filed an application, in the form prescribed by the board, and paid the fee prescribed by the board, for the permit or renewal of the permit; and

(i) all other requirements prescribed by the board for the issuance or renewal of the permit have been satisfied.

Refusal to issue or renew permit

23.3(2)   The registrar

(a) shall refuse to issue a permit to, or to renew the permit of, a corporation if the registrar is not satisfied by proper evidence that the corporation is eligible for the permit; and

(b) may refuse to issue a permit to, or to renew the permit of, a corporation if

(i) a permit issued to the corporation under this Act has been cancelled, or

(ii) a director, officer or shareholder of the corporation is or has been a director, officer or shareholder of a corporation whose permit under this Act has been cancelled.

Notice of refusal

23.3(3)   When the registrar refuses to issue or renew a permit under subsection (2), the registrar shall inform the corporation in writing of his or her decision and the reasons for the decision.

Appeal to board

23.3(4)   A corporation that is refused a permit or renewal of a permit under subsection (2) may appeal the registrar's decision to the board, which may confirm or vary the decision of the registrar.

Validity of permit

23.4      Unless it is cancelled, surrendered or under suspension, a permit is valid for the period specified in the permit.

Business without permit prohibited

23.5(1)   A corporation whose name contains the words "dental corporation" shall not carry on any business in the province unless it holds a valid permit.

Restriction on business of dental corporation

23.5(2)   A dental corporation shall not carry on any business or activity other than the practice authorized by the permit and the provision of other services directly associated with that practice.

Interpretation of business restriction

23.5(3)   Subsections (1) and (2) shall not be construed so as to prohibit a dental corporation from investing its funds in real property, other than for development purposes, or in stocks, mutual funds, debt obligations, insurance, term deposits or similar investments.

Validity of corporate act

23.5(4)   No act of a corporation, including a transfer of property to or by the corporation, is invalid merely because it contravenes subsection (1) or (2).

Voting agreements void

23.6(1)   An agreement or proxy that vests in a person who is not a licensed member the authority to exercise any voting right attached to a share of a dental corporation is void.

Unanimous shareholders' agreements void

23.6(2)   A unanimous shareholders' agreement within the meaning of subsection 140(2) of The Corporations Act in respect of a dental corporation is void unless each shareholder of the corporation is a licensed member or a dental corporation.

Notification of changes

23.7      Every dental corporation shall notify the registrar, within the time and in a form and manner prescribed by the board, of every change in the voting shareholders, the other shareholders, the directors and the president of the corporation.

Application of Act and rules

23.8(1)   This Act and the rules and by-laws of the association apply to a member despite any relationship he or she may have with a dental corporation.

Obligations to clients not diminished

23.8(2)   The fiduciary and ethical obligations of a member, and the obligations of a member respecting confidentiality, to a person receiving professional services

(a) are not diminished by the fact that the services are provided on behalf of a corporation; and

(b) apply equally to a corporation on whose behalf the services are provided and to its directors, officers and shareholders.

Liability of member

23.8(3)   The liability of a member to a person receiving professional services is not affected by the fact that the services are provided on behalf of a corporation.

Liability and voting shareholders

23.8(4)   A person is jointly and severally liable with a dental corporation, or a corporation acting in contravention of section 2, for all professional liability claims made against the corporation in respect of errors or omissions that were made or occurred while the person was a voting shareholder of the corporation.

Effect of member's conduct on dental corporation

23.8(5)   If the conduct of a member through whom a dental corporation was providing professional services at the time the conduct occurred is the subject of a complaint, investigation or inquiry,

(a) any power of inspection, investigation or inquiry that may be exercised in respect of the member or the member's records may be exercised in respect of the corporation or its records; and

(b) the corporation is jointly and severally liable with the member for all fines and costs the member is ordered to pay.

Member's practice restrictions apply to corporation

23.8(6)   Any restriction imposed on the professional practice of a member through whom a dental corporation practises applies to the permit of the corporation in relation to its practice through that member.

Grounds for suspension or cancellation of permit

23.9(1)   Subject to subsection (2), a corporation's permit may be cancelled or suspended by the board if

(a) the corporation ceases to meet any of the requirements set out or referred to in subsection 23.3(1);

(b) the corporation contravenes any provision of this Act or rules or the by-laws of the association; or

(c) a member, in the course of providing professional services on behalf of the corporation, does or fails to do anything as a result of which the member's permit is cancelled, surrendered or suspended.

Limitation

23.9(2)   A dental corporation's permit shall not be cancelled or suspended by reason only of the fact that

(a) one or more shares of the corporation have vested in

(i) an executor or administrator of the estate of an individual as a consequence of the death of the individual, or

(ii) a trustee in bankruptcy on the bankruptcy of the owner of the shares,

unless the individual or owner was the only member through whom the corporation was practising dentistry or the shares continue to be vested in the executor, administrator or trustee for more than 180 days or any longer period allowed by the registrar;

(b) a share of the corporation continues, after a divorce, to be owned by the former spouse of a voting shareholder of the corporation;

(c) a member's right to practise has been temporarily suspended, unless

(i) the member remains a director or officer of the corporation more than 14 days after the suspension, or

(ii) the corporation is not practising through any other member; or

(d) an individual has ceased to be a member, unless

(i) the individual remains a director or officer of the corporation more than 14 days after ceasing to be a member,

(ii) the individual remains a voting shareholder of the corporation for more than 90 days after ceasing to be a member, or for any longer period allowed by the board, or

(iii) the corporation is not practising through any other member.

Alternative to cancellation or suspension

23.9(3)   Instead of suspending or cancelling the permit of a dental corporation, the board may do one or more of the following:

(a) reprimand the corporation or one or more directors or voting shareholders of the corporation;

(b) impose restrictions on the permit;

(c) impose a fine on the corporation in an amount not exceeding $10,000.

Cancellation of permit

23.9(4)   When a corporation's permit is cancelled, it shall promptly surrender the permit to the registrar.

36        Section 32 is repealed and the following is substituted:

Offence of fraudulent application

32        Any person who procures, or attempts to procure, a registration, licence or permit under this Act by wilfully making any false or fraudulent representation or declaration, either orally or in writing, is guilty of an offence.

37(1)     Subsection 33(1) is repealed and the following is substituted:

Offence of practising without a licence

33(1)     Any person who practises, or professes to practise, dentistry in the province in contravention of section 2 is guilty of an offence.

37(2)     Subsection 33(2) is amended by striking out "without being duly licensed and registered as provided in this Act" and substituting "in contravention of section 2".

38        Section 34 is repealed and the following is substituted:

Offence of unauthorized assumption of dental title

34        Any person who wilfully or falsely pretends to be a dentist, dental practitioner or dental corporation, or assumes any dental title, addition or description other than the person actually possesses and is legally entitled to, is guilty of an offence.

39        Section 35 is amended

(a) in the section heading of the English version, by striking out "Penalty for" and substituting "Offence of"; and

(b) by striking out everything after "guilty of an offence".

40        Section 36 is amended by striking out "and is liable, on summary conviction, to a fine of not less than $100. and not more than $500.".

41        Sections 37 and 38 are repealed and the following is substituted:

Disposition of fines

37(1)     Any fine or penalty imposed under subsection 36.1(2) or section 38 shall be paid to the Minister of Finance.

Prosecution of offence

37(2)     Any person may be a prosecutor in the prosecution of an offence under this Act, and the government may pay to the prosecutor a portion of any fine recovered, in an amount that it considers appropriate, toward the costs of the prosecution.

Directors, officers and employees

37.1      If a corporation commits an offence under this Act, a director, officer or employee of the corporation who authorized, permitted or acquiesced in the commission of the offence is also guilty of an offence, whether or not the corporation has been prosecuted or convicted.

Penalty

38        A person who is guilty of an offence under this Act other than under subsection 36.1(1) is liable, on summary conviction,

(a) for a first offence, to a fine of not more than $6,000.; and

(b) for any subsequent offence, to a fine of not more than $30,000.

42(1)      Subsection 43(1) is amended

(a) in the section heading, by adding "and by-laws" after "Rules"; and

(b) by striking out ", regulations" wherever it occurs.

42(2)     Subsection 43(2) is amended

(a) in the section heading of the English version, by adding "and by-laws" after "rules"; and

(b) by striking out ", regulations" wherever it occurs.

42(3)     Subsection 43(3) is amended by striking out ", regulations".

43        Section 44 is amended

(a) by striking out "duly registered member of the association" and substituting "person"; and

(b) by adding "and the person was a licensed member or dental corporation at the time the negligence or malpractice occurred" at the end.

PART 4

THE LAW SOCIETY ACT

C.C.S.M. c. L100 amended

44        The Law Society Act is amended by this Part.

45        Section 1 is amended by adding the following definition in alphabetical order:

"law corporation" means a corporation that holds a valid permit issued under section 61.3; (« cabinet d'avocats »)

46        Section 36 is amended

(a) in subclause (o)(vi), by adding ", or is a director, officer or shareholder of a law corporation that is ordered," after "is ordered";

(b) in subclause (o)(vii), by adding "or her, or is a director, officer or shareholder of a law corporation that is an undischarged bankrupt or has a receiving order in bankruptcy in force against it" after "against him";

(c) by repealing subclause (o)(viii) and substituting the following:

(viii) is, or is a director, officer or shareholder of a law corporation that is, adjudicated a bankrupt and obtains a discharge, or enters into, or is a director, officer or shareholder of a law corporation that enters into, a composition with, or a deed of arrangement for the benefit of, the member's or corporation's creditors, or

(d) in subclause (o)(x), by adding "or her, or against a law corporation of which he or she is a director, officer or shareholder" after "against him";

(e) by repealing subclause (o)(xi) and substituting the following:

(xi) has a judgment given against him or her, or against a law corporation of which he or she is a director, officer or shareholder, involving the payment of money, other than a judgment

(A) limited to the payment of costs,

(B) in respect of the whole of which he or she or the law corporation is entitled to indemnity or relief from some other person, or

(C) evidence of the satisfaction of which has been produced to the society, or

(f) by adding the following after subclause (o)(xii):

(xiii) was a director, officer or shareholder of a law corporation at the time of the circumstances or events that resulted in the revocation of its permit;

(g) in clause (q), by striking out "or" at the end of subclause (iii), by adding "or" at the end of subclause (iv) and by adding the following after subclause (iv):

(v) for the issuance or renewal of a permit under section 61.3;

(h) in clause (s), by adding "or" at the end of subclause (iv) and by adding the following after subclause (iv):

(v) for non-payment by a law corporation of which he or she is a director, officer or shareholder of a permit fee fixed under subclause (q)(v);

(i) in clause (v), by striking out "barristers and solicitors" and substituting "barristers, solicitors and law corporations";

(j) in clause (w),

(i) by striking out "every barrister and every solicitor" and substituting "barristers, solicitors and law corporations", and

(ii) by striking out "his practice" and substituting "their practices";

(k) by repealing clauses (x) and (y) and substituting the following:

(x) require barristers, solicitors and law corporations to furnish to the secretary of the society, as a condition precedent to their being entitled to a certificate or permit entitling them to practise their profession, a certificate of an accountant or of a person approved by the complaints investigation committee, in the form prescribed by the governing body, as to their compliance with the rules of the society respecting accounts;

(y) where a barrister, solicitor or law corporation fails to furnish to the secretary of the society, within the time required by the governing body, a certificate required under clause (x),

(i) in the case of a barrister or solicitor, suspend him or her from practice or strike him or her from the rolls of the society, or

(ii) in the case of a law corporation, suspend or revoke the corporation's permit and suspend from practice or strike from the rolls of the society any barrister or solicitor who is a director, officer or voting shareholder of the corporation;

(l) in clauses (bb) and (dd),

(i) by striking out "any barrister or solicitor" and substituting "barristers, solicitors and law corporations", and

(ii) by striking out "his" and substituting "their"; and

(m) by adding the following after clause (hh):

(ii) make rules respecting law corporations, including, without limitation, rules respecting

(i) the issuance, renewal or revocation of permits, including procedures for obtaining a permit or a renewal of a permit and for imposing conditions on a permit,

(ii) names of law corporations and partnerships whose members include a law corporation, including procedures for the approval of names by which such corporations or partnerships may be known, and

(iii) the disposition of shares of a law corporation owned by a person who is not eligible to own the shares.

47        Subsection 37(1) is amended by adding "or law corporation" after "member of the society" and after "the member".

48        Clause 37.1(2)(b) is amended

(a) by adding "or a law corporation" after "member of the society"; and

(b) by adding "or law corporation" after "received by the member".

49(1)     Subsections 39(1) and (2) are amended by adding "or law corporation" after "member" wherever it occurs.

49(2)     Subsection 39(3) is amended

(a) in the section heading of the English version, by adding "or law corporation" after "Member"; and

(b) in the subsection, by adding "or law corporation" after "member".

49(3)     Subsection 39(4) is amended

(a) in the part before clause (a) and in clause (b), by adding "or law corporation" after "member"; and

(b) in clause (a), by striking out "by the member in his" and substituting "in the recipient's".

49(4)     Subsection 39(5) is amended

(a) by adding "or law corporation" after "member" wherever it occurs in the section heading and in the subsection; and

(b) in clause (a), by striking out "by him".

50        The following is added after section 47:

Right of law corporation to sue for fees, etc.

47.1(1)   A law corporation is entitled to sue for, and recover,

(a) fees for professional services performed by it through one or more members; and

(b) disbursements incurred in relation to such services.

Application of section 47

47.1(2)   Subsections 47(3) to (9) apply, with necessary modifications, to law corporations.

51        Subsection 49(13) is amended

(a) in clause (a), by adding "and, where the member is a director, officer or shareholder of a law corporation, the name of the law corporation" at the end; and

(b) in clause (d), by adding "or the permit of the law corporation" after "member".

52        The following is added after section 50:

Status of law corporation pending inquiry

50.1(1)   Where the governing body or a committee suspends a member from practice or imposes conditions of practice on a member under section 50, the governing body or committee may also suspend the permit of, or impose conditions of practice on, a law corporation of which the member is director, officer or shareholder, until the governing body or committee rescinds the suspension of the member or the conditions of practice imposed on the member.

Notice of suspension or imposition of conditions

50.1(2)   Subsections 50(2) and (3) apply, with necessary modifications, to the suspension of a permit of, or the imposition of conditions of practice on, a law corporation under subsection (1).

53(1)     Subsections 52(1) and (2) are amended by striking out "or" at the end of clause (f) and by adding the following after clause (f):

(f.1) suspend or revoke the permit issued to, or impose conditions of practice on, a law corporation of which the barrister, solicitor or student is a director, officer or shareholder; or

53(2)     Subsection 52(4) is amended

(a) by adding ", or a law corporation of which such a person is a director, officer or shareholder," after " found incompetent"; and

(b) by adding "or she" after "he".

53(3)     Subsection 52(8) is amended by adding "or law corporation" after "member".

54(1)     Subsection 53(1) is amended in the part before clause (a) by adding "or of a law corporation of which the member is a director, officer, shareholder or employee" after "client of the member".

54(2)     Subsection 53(2) is amended

(a) by striking out "of the society" and substituting "or a law corporation"; and

(b) by adding "or law corporation" after "as the member".

55        Subsection 54(1.1) is repealed and the following is substituted:

Appeal by corporation

54(1.1)   A corporation may appeal a decision of the governing body or a committee under section 52 to The Court of Appeal if, by the decision,

(a) the corporation's permit is revoked or suspended; or

(b) conditions of practice are imposed on the corporation.

Time for appeal

54(1.2)   An appeal under subsection (1) or (1.1) shall be commenced within 30 days after the day the appellant or appellant's counsel is served with a copy of the decision or order that is the subject of the appeal.

56(1)     Subsection 56(4) is amended by striking out "No barrister or solicitor" and substituting "No barrister, solicitor or law corporation".

56(2)     Subsection 56(5) is amended by adding "or" at the end of clause (f) and by adding the following after clause (f):

(g) a law corporation from carrying on the practice of a barrister or solicitor.

56(3)     Subsection 56(6) is repealed and the following is substituted:

Offence and penalty

56(6)     A person who contravenes this section is guilty of an offence and is liable, on summary conviction,

(a) for a first offence, to a fine of not more than $6,000.; and

(b) for a second or subsequent offence, to a fine of not more than $30,000.

Offence by corporation

56(6.1)   If a corporation commits an offence under this section, a director, officer or employee of the corporation who authorized, permitted or acquiesced in the commission of the offence is also guilty of an offence and is liable on summary conviction, whether or not the corporation has been prosecuted or convicted,

(a) for a first offence, to a fine of not more than $6,000.; and

(b) for a second or subsequent offence, to a fine of not more than $30,000.

56(4) The following is added after subsection 56(12):

Prosecution of offence

56(13)    Any person may be a prosecutor in the prosecution of an offence under this section, and the government may pay to the prosecutor a portion of any fine recovered, in an amount that it considers appropriate, toward the costs of the prosecution.

57        Subsection 57.1(1) is amended by adding ", other than a law corporation" after "corporation".

58        The following is added after subsection 58(7):

Application to law corporation

58(8)     Subsections (1) to (7) apply, with necessary modifications, to a law corporation as if it were a barrister or solicitor.

59        The following is added after subsection 60(2):

Additional grounds for order

60(2.1)   Where a member is or has been practising the profession of a barrister or solicitor on behalf of a corporation of which the member is or was a director, officer or shareholder, a judge may also make an order under subsection (2) in respect of the property and practice of the member where the judge is satisfied that there are reasonable grounds to believe that

(a) the permit of the corporation has been revoked or suspended; or

(b) the trust money held by the corporation is insufficient to meet its trust liabilities.

Order extended to law corporation

60(2.2)   A judge making an order under subsection (2) in respect of the property and practice of a member may extend its application to the property and practice of a law corporation of which the member is a director, officer or shareholder.

Application of other provisions

60(2.3)   Subsections (3) to (17) apply, with necessary modifications, to a law corporation in respect of whose property and practice an order has been made under subsection (2).

60(1)     Subsection 61(1) is amended

(a) in the part before clause (a), by striking out "member who" and substituting "member or law corporation that";

(b) in clause (a), by adding "or corporation's" after "member's"; and

(c) in clause (b), by striking out "records, if the member" and substituting "or corporation's records, if the member or corporation".

60(2)     Subsection 61(2) is amended

(a) by adding "or law corporation" after "member"; and

(b) by striking out "his" in the English version and substituting "the member's or corporation's".

61        The following is added after section 61:

LAW CORPORATIONS

Definitions

61.1      In this section and sections 61.2 to 61.9,

"member" means a member of the society who holds a valid practising certificate issued by the governing body; (« membre »)

"permit" means a permit issued under section 61.3; (« permis »)

"voting share", in relation to a corporation, means a share of its capital stock that entitles the holder to vote in any election of directors of the corporation; (« action avec droit de vote »)

"voting shareholder", in relation to a corporation, means a person who owns a voting share of the corporation or is a voting shareholder of another corporation that owns a voting share of the corporation. (« actionnaire avec droit de vote »)

Right of law corporation to provide legal services

61.2(1)   Notwithstanding section 44, a law corporation may carry on under its own name the practice or profession of a barrister or solicitor through one or more individuals each of whom is

(a) a member; or

(b) a student acting under the authority and supervision of a member through whom the corporation is carrying on the practice or profession.

Law corporation in partnership

61.2(2)   A law corporation may carry on, as a member of a general partnership of law corporations or of law corporations and members, the practice or profession of a barrister or solicitor through two or more individuals each of whom is

(a) a member; or

(b) a student acting under the authority and supervision of a member through whom the partnership is carrying on the practice or profession.

Corporate permit

61.3(1)   Subject to subsection (2), the chief executive officer shall issue a permit or a renewal of a permit to a corporation if he or she is satisfied that

(a) the corporation is incorporated, formed by amalgamation or continued under The Corporations Act, and is in good standing under that Act;

(b) the name of the corporation includes the words "law corporation";

(c) each voting share of the corporation is legally and beneficially owned by a member or a law corporation;

(d) each other share in the capital stock of the corporation is both legally and beneficially owned by

(i) a person who is a voting shareholder of the corporation or a spouse or child, within the meaning of section 252 of the Income Tax Act (Canada), of a voting shareholder of the corporation, or

(ii) a corporation each share of the capital stock of which is legally and beneficially owned by a person referred to in subclause (i);

(e) each director of the corporation is a member;

(f) the president of the corporation is a member;

(g) each person through whom the corporation will be carrying on the practice or profession of a barrister or solicitor is

(i) a member, or

(ii) a student acting under the authority or supervision of a member through whom the corporation will be carrying on the practice or profession;

(h) the corporation has filed an application, in the form prescribed by the rules, and paid the fee prescribed by the rules, for the permit or renewal of the permit; and

(i) all other requirements prescribed by rules made under clause 36(ii) for the issuance or renewal of the permit have been satisfied.

Refusal to issue permit

61.3(2)    The chief executive officer may refuse to issue a permit or a renewal of a permit to a corporation where

(a) a permit of the corporation has been revoked; or

(b) a director, officer or shareholder of the corporation is or has been a director, officer or shareholder of a corporation whose permit has been revoked.

Business without permit prohibited

61.4(1)   A corporation whose name includes the words "law corporation" shall not carry on any business unless it holds a valid permit.

Valid permit

61.4(2)   Unless it is revoked or surrendered, or is under a suspension, a permit is valid for the period stated in the permit.

Restriction on business of law corporation

61.4(3)   A law corporation shall not carry on any business or activity other than the practice or profession of a barrister or solicitor as authorized by its permit and the provision of services directly associated with that practice or profession.

Interpretation of business restriction

61.4(4)   Subsection (3) shall not be interpreted to prohibit a law corporation from investing its own funds in real property, other than for development purposes, or in stocks, mutual funds, debt obligations, insurance, term deposits or similar investments.

Validity of corporate act

61.4(5)   No act of a corporation, including a transfer of property to or by the corporation, is invalid merely because it contravenes subsection (1) or (3).

Voting agreements void

61.5(1)   An agreement or proxy that vests in a person who is not a member the authority to exercise any voting right attached to a share of a law corporation is void.

Unanimous shareholders' agreements void

61.5(2)   A unanimous shareholders' agreement within the meaning of subsection 140(2) of The Corporations Act in respect of a law corporation is void unless each shareholder of the corporation is a member or a law corporation.

Application of Act and rules

61.6(1)   This Act and the rules of the society apply to a member or student despite any relationship he or she may have with a law corporation.

Obligations to clients not diminished

61.6(2)   The fiduciary and ethical obligations of a member or student, and the obligations of a member or student respecting confidentiality and solicitor-client privilege, to a person receiving the services of a barrister or solicitor

(a) are not diminished by the fact that the services are provided on behalf of a corporation; and

(b) apply equally to a corporation on whose behalf the services are provided and to its directors, officers and shareholders.

Liability of member

61.7(1)   The liability of a member for a professional liability claim as defined in subsection 38(2) is not affected by the fact that the member is practising as a barrister or solicitor on behalf of a corporation.

Liability of voting shareholders

61.7(2)   A person is jointly and severally liable with a law corporation, or a corporation acting in contravention of section 56, for all professional liability claims made against the corporation in respect of errors or omissions that were made or occurred while the person was a voting shareholder of the corporation.

Grounds for suspension or revocation of permit

61.8(1)   Subject to subsection (2), a law corporation's permit may be revoked or suspended in accordance with the rules if

(a) the corporation ceases to meet any of the conditions set out or referred to in subsection 61.3(1);

(b) the corporation contravenes any provision of this Act or the rules; or

(c) a member or student, in the course of providing the services of a barrister or solicitor on behalf of the corporation, does or fails to do anything as a result of which the member or student is found to be incompetent or guilty of professional misconduct or conduct unbecoming a barrister, solicitor or student.

Limitation

61.8(2)   A law corporation's permit shall not be revoked or suspended by reason only of the fact that

(a) one or more shares of the corporation have vested in

(i) an executor or administrator of the estate of an individual as a consequence of the death of the individual, or

(ii) a trustee in bankruptcy on the bankruptcy of the owner of the shares,

unless the individual or owner was the only barrister or solicitor through whom the corporation was practising law or the shares continue to be vested in the executor, administrator or trustee for more than 180 days or any longer period allowed by the chief executive officer;

(b) a share of the corporation continues, after a divorce, to be held by the former spouse of a voting shareholder of the corporation;

(c) a barrister's or solicitor's right to practise has been temporarily suspended, unless

(i) the barrister or solicitor remains a director or officer of the corporation more than 14 days after the commencement of the suspension, or

(ii) the corporation does not practise law through any other barrister or solicitor who is entitled to practise; or

(d) a barrister or solicitor has ceased, for any reason other than his or her death or bankruptcy, to be a member of the society, unless

(i) the barrister or solicitor remains a director or officer of the corporation more than 14 days after ceasing to be a member,

(ii) the barrister or solicitor remains a voting shareholder of the corporation for more than 90 days after ceasing to be a member, or for any longer period allowed by the chief executive officer, or

(iii) the corporation does not practise law through any other barrister or solicitor who is entitled to practise.

References in other Acts, regulations, etc.

61.9      Unless expressly provided otherwise, a reference in any other Act or any regulation, rule, by-law or order made under any other Act to a person entitled to carry on the practice or profession of a barrister or solicitor, whether as barrister, solicitor, lawyer, member or otherwise, shall be deemed to include a reference to a law corporation.

PART 5

CONSEQUENTIAL AMENDMENTS AND COMING INTO FORCE

C.C.S.M. c. C225 amended

62(1)     The Corporations Act is amended by this section.

62(2)     The following is added after subsection 12(7):

Directing change of name of professional corporation

12(7.1)   Where the Director is notified in writing by the proper officer of the governing body of a profession that a corporation whose name was approved by the governing body

(a) has not applied for a permit or licence, or a renewal of a permit or licence, to practise the profession;

(b) having applied, has been denied a permit or licence or a renewal of a permit or licence to practise the profession; or

(c) having been granted a permit or licence to practise the profession, has had the permit or licence suspended, revoked or cancelled;

the Director shall direct the corporation to change its name in accordance with section 167 to a name that complies with this Act and the regulations and does not require the written consent of the governing body.

62(3)     Subsection 12(9) is amended by adding ", (7.1)" after "(7)".

Coming into force

63        This Act comes into force on a day fixed by proclamation.