More About Professional Corporations
More About Professional Corporations
The time you’ve put into developing your expertise and experience has all been for this: you’re ready to help others with your own private practice. With your degree and licensing in place, you are now ready to form your own company.
When looking at how to start your own audiology private practice in California, you need to make sure your business is legally sound. Choosing the right business entity is vital to a successful audiology company.
What is an Audiology Professional Corporation?
An Audiology professional corporation is a corporation that is registered with the California Secretary of State and engaged in rendering the professional services of Audiology. To learn more about professional corporations, check out our professional corporation’s general information page here.
Who regulates Audiology Corporations?
The Department of Consumer Affairs – Speech-Language Pathology & Audiology & Hearing Aid Board regulates Audiology Corporations.
What are the California State Laws that regulate the formation of an Audiology corporation?
- California Corporations Code – 13401(b)
- Business and Professions Code – Audiology Corporations is located in the California Business and Professions Code starting with Section 2536.
- California Code of Regulations – Title 16, Division 13.4, Article 9. Speech-Language Pathology and Audiology Corporations
These codes and regulations require that all professional audiology practices in California must operate under a professional corporation. This business entity choice not only provides adequate legal protection for professional audiologists but also includes advantages that sole proprietorships or partnerships don’t have.
Is there an easy place to get access to all of the laws and regulations related to a Professional Audiology Corporation?
The Speech-Language Pathology & Audiology & Hearing Aid Dispensers Board has put together a list of the laws and regulations for professional audiologists. If you are considering starting your own private practice in California as an Audiologist, we recommend checking out the Audiology Board Laws and Regulations here.
Who can be a shareholder or owner in an Audiology corporation?
The following licensed persons may be shareholders, officers, directors, or professional employees of the Audiology corporation so long as the sum of all shares owned by those licensed persons does not exceed 49 percent of the total number of shares of the Audiology corporation, and so long as the number of those licensed persons owning shares in the Audiology corporation does not exceed the number of persons licensed by the governmental agency regulating the designated professional corporation. This rule does not limit employment by an Audiology corporation to only those licensed professionals listed.
(1) Licensed speech-language pathologists.
Can an Audiology be a shareholder in more than one Professional Corporation?
Yes, an Audiology may be a shareholder in more than one Professional Corporation.
Do I have to follow any Name style formalities when I form my Audiology Corporation?
The name of the corporation must comply with California Business and Professions Code 2537.4.
The name of an audiology corporation under which it may render professional services shall include one of the words specified in subdivision (b) of Section 2530.3 and the word “corporation” or wording or abbreviations denoting corporate existence.
2530.3.(b) states: A person represents himself or herself to be an audiologist when he or she holds himself or herself out to the public by any title or description of services incorporating the terms “audiology,” “audiologist,” “audiological,” “hearing clinic,” “hearing clinician,” “hearing therapist,” or any similar titles.
Can I Use A Fictitious Name For My Business?
The Audiology Board does not prohibit using a fictitious name or a “DBA”.
Do I need a Certificate of Registration as an Audiology Corporation?
No. Any professional corporation or foreign professional corporation rendering professional services by persons duly licensed by the Department of Consumer Affairs – Speech-Language Pathology & Audiology & Hearing Aid Board shall not be required to obtain a certificate of registration in order to render those professional services.
Can anyone serve as an officer or director of an Audiology corporation?
These offices are dependent on the number of shareholders of the Audiology corporation.
In general, each director, shareholder, and officer of an Audiology Corporation, except an assistant secretary and an assistant treasurer, shall be a licensed Audiologist.
Here are the exceptions:
- An Audiology corporation that has only one shareholder needs to have only one director who shall be such shareholder and who shall also serve as the president and treasurer of the corporation. The other officers of the corporation in such a situation need not be licensed persons.
- An Audiology corporation that has only two shareholders needs to have only two directors who shall be such shareholders. The two shareholders between them shall fill the offices of president, vice president, secretary, and treasurer.
Is there a great resource to find the California Laws and Regulations related to the Practice of Audiology in a Professional Audiology Corporation?
Yes, you can find the 2018 guide here:
Audiology Board Laws and Regulations
Client Question: I recently graduated in August and moved myself down to Tustin, California (greater LA area). I tried to find a suitable associate position but have found that to be close to impossible I am in the process of starting my own small clinic.
I am having a hard time finding a small business attorney to help me decide on what kind of business entity I want to be, every local audiologist that I have asked has only told me how much they hate their attorney and are looking for a new one.
I think it is best to limit my liability by going for a PC (or professional corporation, the California version, or an LLC) or an S-Corp since I will hope to be taking out a small business loan to start out. I just don’t know which will be better for me as a single audiologist clinic starting out. I know there are different tax implications for each form but even after researching online, I couldn’t really figure out what they were. The only disadvantage I have heard on in an S-Corp is that you have to have yearly documented board meetings in order to maintain legitimacy, which I think would consist of me sitting in a room talking to myself saying “same plan as last year guys? Yeah, that sounds good”.
A few audiologists have recommended that I do all the paperwork and incorporation online rather than through an attorney as it is faster and saves a lot of money, has anyone been burned by this before?
What corporation is best for a small startup clinic, and how did you form your company: online or through an attorney?
These are a ton of questions, and it’s quite understandable why you have all of these running around in your mind. After all, you want to make sure that you start your small clinic and audiologist private practice right.
The best decision to make is to work with a corporate attorney that specializes in forming Professional Audiology Corporations in California. By working with an experienced lawyer, you can be sure that all your questions will be answered.
A dependable corporate lawyer will help you understand how a professional corporation is a correct entity for your Audiology service, assist you through the process of forming the Professional Audiology Corporation in California, and be available for you when you need legal and corporate advice.
The short answer to your question: the best option for an audiologist setting up a small clinic and running it as a one-person Audiology operation would be to form a professional Corporation making the S election for tax purposes. There are a lot of complexities in the forming of a professional corporation. You need to satisfy not only state law but the specific requirements of your particular board. Though I suppose it would be possible to learn how to make diagnosis for certain hearing conditions by studying some online service like YouTube or Google, the most reasonable thing for a person to do is turn it over to a professional like an audiologist. The same is true when it comes to practicing law. It is far better to allow the professionals to guide you through the complicated process, rather than to try to figure out how to do it online. Just to simply avoid the problems that you will run into with the Department of Consumer Affairs – Audiology Board will make the investment in using a professional to form your corporation well worth the money.
How to Start Your Own Audiology Private Practice: California Experts Protect Themselves with a Professional Corporation
You’ve worked hard to be where you’re at the schooling, licensing, experience. Forming your own Audiology private practice in California shouldn’t be taken lightly—this is a big step for you and your future. Working with an attorney who specializes in forming professional corporations for Audiologists is one of the best moves for your new business. Talk to an expert today!
