More About Professional Corporations
More About Professional Corporations
Many surgeons and physicians look forward to starting their own medical practice. They aim to have more autonomy, bigger profits, and flexible work hours while doing what they love and serving people.
But it’s not just licensed physicians and surgeons. Physician assistants, too, aspire to run their own medical practice. However, this also means that they will have to hire licensed physicians as employees. If you are a PA looking to run your own clinic, you’re probably wondering: “Can physician assistants own their own practice in California?”
One of our clients had the same issue so we provided a detailed answer on the difference between a physician assistant professional corporation and a medical corporation in California. We also explain the laws that allow physician assistants to own their own practice and hire licensed healthcare professionals. Find out more!
Same Codes, Different Perspectives
Incorporation laws in the state of California can be complicated for professionals who are new to running a business. Even corporate lawyers themselves can be misinformed. Here’s a perfect example:
Our client needed help writing a contract to hire a physician assistant as an independent contractor and act as supervising physician. She then consulted a lawyer who claimed that this was against California law, which states that only physicians can own medical practices. And that to conduct a medical business, physicians must own 51% of the business. The lawyer also stated that PAs could not run a medical practice and hire a physician as an employee or contractor.
In the context of a professional medical corporation, the lawyer is correct. Licensed physicians can own 51% of the shares, while the co-shareholders who are non-physicians can own up to 49%. Presumably, this is in reference to California Corporations Code 13401.5 (which we will also use to refute the lawyer’s claim). However, understand that a professional medical corporation is completely different from a physician assistant corporation.
Can Physician Assistants Own Their Own Practice in California? Two Things You Need to Look At
First, we asked the client one of the important questions: “What are you trying to accomplish?” This is crucial in determining whether a physician assistant can act as supervising physician and hire licensed physicians as employees is permissible in the state of California.
In order to determine whether a physician assistant can own a medical corporation and whether a physician assistant can hire licensed health professionals (i.e., doctors, surgeons, etc), we need to look at the type of corporation.
A. A Physician Assistant Corporation is Designated Under Corporations Code 13401.5
It is as simple as this: If you want to form a professional medical corporation, you need at least 51% physician ownership. On the contrary, you need at least 51% physician assistant ownership if you want to form a physician assistant corporation.
While the physician assistant can own at least 51% of the shares, the co-shareholders can own up to 49%. Among the licensed professionals who are allowed to be co-shareholders under the physician assistant corporation include:
- Licensed physicians and surgeons
- Registered nurses
- Licensed acupuncturists
- Naturopathic doctors
- Licensed midwives
B. A Physician is Duly Licensed Under Division 2 of the Business Professions Code
Are physicians duly licensed under the Division 2 of the Business Professions Code (BPC)? The answer is yes, and the details are found in the Business and Professions Code of 2011 California Code under Division 2 (Healing Arts [500 – 4999.122]) Chapter 7.7, Article 8 Here, it also authorizes physician assistant corporations to render professional services. You may check the following codes for further details:
- DIVISION 2. HEALING ARTS [500 – 4999.129] (Division 2 enacted by Stats. 1937, Ch. 399.)
- CHAPTER 5. Medicine [2000 – 2529.6] (Chapter 5 repealed and added by Stats. 1980, Ch. 1313, Sec. 2.)
- ARTICLE 1. Administration [2000 – 2028.5] (Article 1 added by Stats. 1980, Ch. 1313, Sec. 2.)
Chapter 2000 shall be known and may be cited as the Medical Practice Act. Whenever the provisions of any statute refer to the Medical Practice Act, it refers to the provisions of this chapter.
Who Can Own a Medical Corporation in California?
Medical professionals who are designated under the Division 2 of the Business and Professions Code and can own a medical professional corporation include:
- Doctors of podiatric medicine
- Licensed optometrists
- Registered nurses and licensed psychologists
- Licensed marriage and family therapists and clinical social workers
- Licensed physician assistants
- Licensed chiropractors and acupuncturists
- Naturopathic doctors
- Licensed professional clinical counselors, and physical therapists
- Licensed pharmacists
- Licensed midwives
We provide detailed steps on how to form a professional medical corporation in this article.
Can A Physician Assistant Hire a Licensed Healthcare Professional?
The California Corporations Code 13401.5. states that a professional corporation may employ any person duly licensed under Division 2 of the Business and Professions Code (BPC). Since physicians are among those duly licensed under Division 2 of the BPC, a professional physician assistant corporation may hire a licensed physician to render professional services.
In summary, physician assistants can hire licensed healthcare professionals as long as the physician assistant corporation is operating within its bounds and the professional you want to hire is covered under Division 2 of the BPC.
Still Confused If Physician Assistants Can Own Their Own Practice in California? We’ll Help!
If you are a PA looking to start your own medical practice, there’s hope with a physician assistant professional corporation. Knowing the laws that cover this brings you closer to your dream of running your own clinic in California. We understand how the codes for California corporate practice of medicine for a physician assistant can be confusing but things become clearer with the help of experienced corporate lawyers.
Incorporation Attorney offers legal services that can help you set up your physician assistant corporation or medical professional corporation. We have helped numerous start-ups over the years and we continue to offer guidance on legal matters whenever necessary. If you need our corporate expertise, call us right away +1 (714) 634-4838 or explore our website for more information.
