Medical corporations can only be created for medical doctors and chiropractors. Medical doctors and chiropractors can incorporate as either medical corporations or professional corporations. Medical corporations are incorporated under the Medical Corporation Act and must contain one of the following abbreviations: Chartered, Limited, Ltd., Service Corporation or S.C.

Medical corporations are often preferable to professional corporations because they require fewer formalities and they are more flexible. However, limited liability companies are also an option for medical doctors that may offer additional advantages depending on the ambitions of the owners.

Exit strategies are essential for medical corporations to ensure that the corporation is not forced to liquidate due to the revocation or suspension of a shareholder’s license or upon the death or disability of a shareholder.

It is advisable to have a predetermined method for evaluating the stock and some form of redemption, cross-purchase or buy-sell agreement. There are alternative considerations that must be addressed for medical corporations with a sole shareholder. Any type of exit strategy should also be reflected in each individual shareholder’s estate plan as it may have unforeseen tax consequences.