Regulatory Compliance When Buying or Selling a Dental Practice in Ontario
Dental practice sales must comply with the Royal College of Dental Surgeons of Ontario (RCDSO) and the Personal Health Information Protection Act (PHIPA). Failure to comply can delay closing, create liability, or damage the practice goodwill.
Regulatory compliance is where dental practice sales differ most from general business M&A. RCDSO and PHIPA requirements touch every aspect of the transaction — patient records, ownership notifications, and post-closing obligations. This is a core part of every dental practice transaction we handle.
Patient Records and PHIPA Obligations
Patient records contain Personal Health Information (PHI). PHIPA imposes strict rules on handling, access, and transfer. Key principle: the selling dentist remains the Health Information Custodian (HIC) until closing. As HIC, the seller is responsible for ensuring patient information is accurate, secure, and accessible, and that any transfer complies with PHIPA and RCDSO regulations. Upon closing, custody transfers to the buyer (new HIC), provided patients are notified and given the opportunity to request their records be transferred elsewhere. This notification process must be planned and executed carefully as part of the closing process.
RCDSO Requirements
The RCDSO has specific requirements around continuity of care during ownership transitions, retention and storage of records (minimum retention periods apply), and notification to patients when a dentist departs a location. Patients should be informed about the sale, the identity of the new dentist, and how their care will continue. Record retention obligations follow the dentist for a prescribed period, regardless of who owns the practice at the time a patient requests their records.
Confidentiality During Negotiations
During due diligence, buyers need access to financial and practice information. A well-drafted NDA must be in place before sharing any confidential information. Patient-identifying information should not be disclosed unless absolutely necessary and only with appropriate safeguards. Any due diligence access should comply with PHIPA and RCDSO expectations — this is an area where general business practices can inadvertently create regulatory exposure for dental sellers.
Regulatory Filings and Notifications
Depending on the transaction structure, the following may be required: updating RCDSO with practice address and corporate information, updating corporate filings for director and officer changes, updating billing information with insurers and third-party payors, and notifying the RCDSO if acquiring shares of a dentistry professional corporation (within 10 days of any change in shareholders). Missing or late notifications can result in regulatory penalties and complications with billing.