What is the difference between a professional corporation and a general business corporation in terms of liability?

Both are corporations under the same Business Corporations Act framework, and both give shareholders the general benefit of limited liability: a distinct legal person that generally shields shareholders from the corporation's ordinary business debts, contracts, and third-party liabilities, subject to the narrow circumstances where a court will disregard that separateness. On that level, a professional corporation works the same way as any other Ontario corporation.

The key difference is professional liability. A shareholder in a professional corporation remains personally liable for their own negligence or malpractice in providing the professional service, in essentially the same way as if they were practising individually or in a partnership — incorporation doesn't shield that. A shareholder in a general business corporation typically doesn't face an equivalent personal-negligence carve-out for the corporation's ordinary commercial activities. In both cases, personal guarantees on loans or leases, and certain statutory obligations like unremitted payroll deductions, can still reach an individual director personally regardless of the corporate structure. Understanding this distinction matters most when deciding how much protection incorporation is actually giving you.