More About Professional Corporations
More About Professional Corporations
Expect a few hiccups when you form your own marriage and family therapy corporation on your own. If you cannot afford making mistakes, consulting a corporate attorney is the still the best way to go. An incorporation attorney will be able to guide you from start to finish and help you understand the MFT name requirements, the corporation rules, and the type of corporation your profession falls under.
Professional Corporation vs General Stock Corporation: What Are the Namestyle Rules for Your Type of Corporation?
One of the first steps in forming your private practice is to choose a name for your corporation. It’s the most important step because you cannot draft your articles of incorporation without it. The articles of incorporation are necessary to form your corporation. But what type of corporation does your profession belong?
Unlike what you have learned from Google research, there are several types of corporations, namely the general stock corporation and professional corporation. Each have their own sets of rules.
General Stock Corporation
A general stock corporation is often referred to as a C-corporation. Under the law, a general stock corporation exists as an entity separate from its owners or shareholders. The shareholders may issue or offer stocks privately for expansion or other purposes.
You can set up your business as a general stock corporation if you want to set up the following:
- Auto mechanic shops
- Restaurants
- Online businesses
What are the Namestyle Rules for General Stock Corporation?
When forming a general stock corporation, the choice of name is up to you as long as the name is not likely to mislead the public or resemble too closely some other name already on file with the state.
The name selected generally may not include words such as:
- Bank
- Trust or Trustee
- Industrial loan
- Investment and loan
- Thrift
- Cooperative
- Olympic or Olympia
With general stock corporation, the name selected need not include words that indicate corporate designations, such as: Incorporated, Inc., or Corp.
Professional Corporation
Professional corporations (PCs) or professional service corporation is designed for a specific group of professionals. It is the entity of choice for professionals, such as:
- Lawyer
- Engineers
- Accountants
- Doctors
- Marriage and family therapists
In California, such professionals are not allowed to set up a private practice or a company with an LLC (limited liability company) entity. So, if you are planning to set up a marriage and family therapy clinic, you need to form a professional corporation and follow the marriage and family therapist name requirements to the letter to avoid getting declined.
What About Marriage and Family Therapy Corporations?
The rules for professional corporations are more complicated than those for general stock corporation. The namestyle rules are specific to the license that you hold and for each kind of professional corporation.
Keep in mind that these rules also affect all of the formation paperwork that you need to put together while creating your corporation. The corporate name requirements are regulated by:
- California Corporations Code
- Business and Professions Code
- California Code of Regulations
Many laws in California cover professional corporations. However, a specific set of laws known as the Moscone-Knox Professional Corporation Act found in the Business and Professions Code directly deals with PCs.
Meanwhile, the MFT practice name requirements in California are also regulated by the California Board of Behavioral Sciences. The goal of the agency, aside from scrutinizing a corporation’s compliance with the namestyle rules, is to ensure competency in the mental health profession and to protect the consumers.
Aside from MFT, the California Board of Behavioral Sciences also regulates the following professions:
- Clinical social workers
- Educational psychologists
- Professional clinical counselors
With the number of rules that you need to follow, it would be a challenge to form a law-compliant professional corporation on your own. Your probability of getting rejected and doing everything all over again is high without an expert assisting you. That said, it’s best to seek help from an incorporation attorney who knows MFT name requirements inside and out.
What Are the Namestyle Rules for Marriage and Family Therapy Corporation?
Aside from the general namestyle rules that you need to follow, there are also namestyle rules set specifically for marriage and family therapy corporation. It is critical to note that the California Board of Behavioral Sciences takes the position that it is unprofessional conduct not to follow the particular namestyle rules for your profession. Just because others are doing it does not make it a valid excuse. Remember, it’s your professional license.
MFT Practice Name Requirements in California
So, what are the specific namestyle rules for a licensed marriage and family therapy corporation? It all boils down to a set of define words that must be included in your corporate name, such as:
- Marriage, family, or child together with
- Counseling, counselor, therapy, or therapist
- Wording or abbreviations denoting corporate existence (Incorporated, Inc., Corporation)
What If You Want a DBA Different Than Your Corporate Name?
If you want to operate under a name different than your corporation name, you can certainly do so by applying for a DBA (doing business as…) or a fictitious name permit. BUT, it also comes with rules.
First, a marriage and family therapy corporation that conducts business under a fictitious business name cannot use any name that is false, misleading, or deceptive.
Let’s say your name is Wilma Flintstone, a licensed marriage and family therapist, and your corporate name is “Wilma Flintstone, LMFT, a Licensed Marriage and Family Therapist Corporation”. You can then apply for the DBA with the fictitious name “Wilma’s Holistic Therapy”, which is catchier.
On another note, if your goal is to set up multiple clinics with different fictitious names, remember that each name requires a separate application.
Key Takeaways in Forming Your Own MFT Professional Corporation
The professional corporation formation and MFT practice name requirements in California can be quite challenging for any professional forming their own private practice. You may repeat the same process if you fail to comply with the rules and regulations and spend more money. Getting lost in the minutia of namestyle rules for professional corporations is just one of the 49 different ways you can get tangled up in the formation of your corporation if you tackle it yourself. Before naming your MFT corporation, remember these two tips:
- Make sure your corporate name has all of the required keywords.
- Make sure your corporate name has the correct corporate designator.
If You Want to Get the MFT Practice Name Requirements in California Right, Get Help
Mistakes can be prevented if you work with a seasoned incorporation attorney in California. You can immediately start focusing on building your clinic if you complete the formation process right away. Having an incorporation attorney by your side helps you get things done right and fast. The time you would spend on the seemingly endless paperwork would then be diverted to organizing your staff, building your client base, and conceptualizing your clinic’s services.
Incorporation Attorney can help you achieve your goals, as we have helped hundreds of professionals in California. We will assist you in forming your professional corporation, help you draft your articles of incorporation and bylaws if needed, and ensure you comply with the MFT practice name requirements in California.
We invite you to sit down with us and talk about your plans. Call us today at +1 (714) 634-4838.
