Why You Need an Attorney: Best Guide in Forming a Professional Medical Corporation in California
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What Should I Do After Receiving a Professional Corporation Medi-Cal Denial Letter
Can Doctors Practice Across State Lines? How to Move Your Corporation and Use Your Medical License in California
Requirements for a Fictitious Name Permit for Medical Corporations in California
Many medical professionals are starting their own companies because the medical industry is a lucrative business. If you are planning to start a professional medical corporation in California, this article will help guide you through the basics!
What is a Professional Medical Corporation?
A professional medical corporation is a form of professional corporation that is officially registered with the California Secretary of State, and is legally authorized to render professional services as medical doctors.
What is the Government Agency That Regulates Professional Medical Corporations?
All professional corporations are required by law to register with the respective government agencies that regulate the profession that they belong. Professional medical corporations are regulated by the Medical Board of California.
What are the California State Laws that regulate the formation of a Professional Medical Corporation?
Professional medical corporations must abide by these California State Laws and Codes:
- California Corporations Code
- Business and Professions Code
- California Code of Regulations Title 16. Professional and Vocational Regulations, Division 13. Medical Board of California, Chapter 1. Division of Licensing, Article 13. Professional Corporations
Read the full text of these laws or codes at the end of this page.
Client Question: I recently moved to the San Francisco Bay Area, and I am planning to start my own business. What corporation is best for a small startup clinic, and did you form your company online or through an attorney?
Many budding entrepreneurs choose to start their own businesses by themselves. Some of them follow guidelines and tips available on the Internet. These business people choose not to hire an attorney to help them because they think they can save money if they do all the processes by themselves. But, they commonly end up spending more money fixing the problems that arise later on due to incomplete requirements or improper filing. Hiring a trustworthy corporate lawyer to assist you in the process of starting your clinic is the wiser option. An expert legal adviser can make sure all the documents needed are prepared correctly and can help ensure that the business formation process is performed thoroughly and legally. Forming a business the right way can help you avoid a plethora of legal and corporate problems in the long run.
Common Questions Asked When Starting a Professional Medical Corporation in California
We’ve listed down the most common questions that medical professionals ask when starting their own company or practice in California, and these are:
Do I have to follow any name-style formalities when I form my Professional Medical Corporation?
The law requires that the business name of a medical corporation in California must be restricted to the name or surname of one or more of the present prospective or former stockholders of the corporation who are physicians for a medical corporation.
Can I use a fictitious name for my medical business in California?
Yes, you can. But, a Fictitious Name Permit must be filed with the Medical Board of California. This is according to Section 2415 of the California Business and Professions Code. A minimal fee is required when applying for a Fictitious Name Permit.
To know the names of the current Fictitious Name Permits, go to the official website of the Medical Board of California at www.mbc.ca.gov.
What are the important bylaws in a Professional Medical Corporation?
Bylaws are an essential part of any corporation because they establish rules on how to deal with concerns in the company, such as who can be issued shares and who can serve as officers and directors. The bylaws are drafted specifically for a Professional Medical Corporation.
Who can be a shareholder in a Professional Medical Corporation?
Stock in a Professional Medical Corporation can be issued to the following licensed persons:
- Licensed doctors of podiatric medicine.
- Licensed psychologists.
- Registered nurses.
- Licensed optometrists.
- Licensed marriage and family therapists.
- Licensed clinical social workers.
- Licensed physician assistants.
- Licensed chiropractors.
- Licensed acupuncturists.
- Naturopathic doctors.
- Licensed professional clinical counselors.
- Licensed physical therapists.
- Licensed pharmacists.
Any of the licensed professionals listed above can be shareholders in a Professional Medical Corporation, so long as the sum of all their shares does not exceed 49 percent of the total number of shares of the company, and so long as the number of stockholders does not exceed the number of persons licensed by the Medical Board of California.
This rule does not mean that the Professional Medical Corporation should only employ the licensed individuals on the list.
Can anyone serve as an officer or director of a Professional Medical Corporation?
The same list of licensed professionals that can issue stocks is eligible to hold office as a board member or director in a Professional Medical Corporation.
If a Professional Medical Corporation has only one stockholder, that shareholder can hold the position of director in the company. That same shareholder can also serve as president and secretary of the business. In this situation, the other officers of the corporation need not be licensed individuals.
In the situation where the Professional Medical Corporation only has two stockholders, these two individuals can, among themselves, fill the offices of president, vice president, secretary, and treasurer.
Can a medical doctor in another state move their business to California?
We’ve had enough people ask this question, we actually have an entire article on it! Check it out here!
What documents and certificates do we need to comply with when starting a medical corporation in California?
Unlike other types of professional corporations, medical businesses have fewer certificates or documents of compliance.
Client Question: I am moving my Professional Medical Corporation to a larger facility in a neighboring city of Irvine, California. Is there any requirement that I notify the California medical board of the change of address for my medical corporation?
California law requires all licensees to report each and every change of address/email within 30 days after each change. The request to change or update the address must be in writing and include the following information: name, license/registration number to ensure correct identification, old and new address, signature, and date.
You may submit a change of address/email by one of the following methods:
- Online via the BreEZe Online Services
Step-by-Step User Guide for Physicians to Complete Change of Address Online - By mail to:
Medical Board of California
Licensing Program
2005 Evergreen Street, Suite 1200
Sacramento, CA 95815
- By fax at:
(916) 263-2944
If the new address is a post office box, the licensee is required by law to provide the Board with a separate street address which will be kept confidential and not publicly disclosed. The street address of a private mail box service may not be used as a confidential street address. Even if a licensee gives a street address, he or she may provide a second street address that will remain confidential.
NOTE: California law requires the Board to provide upon written or verbal request, the address of record of any licensed practitioner. The address of record will be released to any individual or entity who inquires and is also available to the public on the Board’s website. Each licensee should carefully consider the address of record provided to the Board and may wish to use an office, employer’s address, or a post office box as the address of record.
The Board uses the address of record to mail all licenses, renewal notices, and ALL other official correspondence.
Do I have to file a Medical Corporation Special Report with the Board of Medical Examiners to keep them apprised of changes in my medical corporation?
No, there is generally no need for your medical corporation to submit a special report to the Board of Medical Examiners when making changes within the corporation.
However, an important exception applies if your medical corporation has filed a Fictitious Name Permit (FNP) with the California Medical Board. In such cases, you are required to update the board with any change of address by filing an amendment.
Do I need a certificate of registration as a Professional Medical Corporation?
No. Medical corporations in California are not required to obtain a certificate of registration.
How do I notify the Board of a change of address?
To notify the Board of a change of address, you must complete and submit the Fictitious Name Permit – Change of Address Form. This form can be mailed, emailed, or faxed, but it must be signed by a current owner of the permit.
Please note that the Board does not automatically issue an updated wall certificate when processing an address change. If you need a replacement certificate, you will need to complete and submit an Application for a Duplicate Fictitious Name Permit form.
California Laws/Codes that Apply to Professional Medical Corporations
Corporations Code
