More About Professional Corporations
More About Professional Corporations
Take note though that only nurse practitioners can form a nurse practitioner professional corporation and not registered nurses. Nurse practitioners and registered nurses may have similar job descriptions but they differ in several areas. Let’s discuss further….
Registered Nurses (RNs) vs Nurse Practitioners (NPs): Differences and Similarities
If you are a nursing professional, forming a nurse practitioner professional corporation can set you up for more success in your field of expertise. But before you become a nurse practitioner, you need to first earn a bachelor’s degree in nursing to become a registered nurse (RN). Your next step would be to earn your master’s degree in nursing (MSN) to become a nurse practitioner (NP).
You may be asking what’s the difference. After all, RNs and NPs are both nurses. Registered nurses and nurse practitioners have similarities and differences in terms of job descriptions.
Similarities
Both the RNs and NPs monitor the health and provide the needed care for patients. Their sets of tasks may also differ depending on their work location. While most of them are found in private or public hospitals, RNs and NPs may also be employed in assisted living facilities, schools, and companies, among others.
Differences
- While the roles of registered nurses and nurse practitioners are focused on patient care and monitoring, they differ in terms of autonomy.
- Nurse practitioners are authorized to perform some physician duties like ordering tests, prescribing treatments, and diagnosing a patient’s condition. Registered nurses are not allowed to perform these.
- Registered nurses need to be always guided by a physician, whereas nurse practitioners can act as a primary care provider. It means they can function without the supervision of a licensed physician.
- Registered nurses need to earn a bachelor’s degree and pass the NCLEX (National Council Licensure Examination) before applying for a license. Nurse practitioners, on the other hand, must earn a master’s degree or higher. NPs are also required to complete more clinical hours and obtain certifications and training if they wish to work with certain patient groups.
Some nurse practitioners decide to take their career to the next level and go into private practice. This allows them to enjoy more flexible work hours and earn a higher salary. And it all starts by forming a nurse practitioner professional corporation.
What is a Nurse Practitioner Professional Corporation?
A Nurse Practitioner corporation is a corporation which is registered with the California Secretary of State and engaged in rendering the professional services of Nurse Practitioner.
Who Regulates Nurse Practitioner Professional Corporations?
The California Board of Registered Nursing (BRN) regulates nurse practitioners in the state.
What are the California State Laws that Regulate the Formation of a Nurse Practitioner Professional Corporation?
Nurse practitioner professional corporations are regulated by the following state laws:
- California Corporations Code
- Business and Professions Code – The Nursing Practice Act is located in the California Business and Professions Code starting with Section 2700.
- California Code of Regulations
Who can be a Shareholder in a Nurse Practitioner Professional Corporation?
The following licensed persons may be shareholders, officers, directors, or professional employees of the Nurse Practitioner 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 Nurse Practitioner corporation, and so long as the number of those licensed persons owning shares in the Nurse Practitioner 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 Nurse Practitioner corporation to only those licensed professionals listed.
(1) Licensed physicians and surgeons.
(2) Licensed doctors of podiatric medicine.
(3) Licensed psychologists.
(4) Licensed optometrists.
(5) Licensed marriage and family therapists.
(6) Licensed clinical social workers.
(7) Licensed physician assistants.
(8) Licensed nurses.
(9) Licensed acupuncturists.
(10) Naturopathic doctors.
(11) Licensed professional clinical counselors.
Can a Nurse Practitioner be a shareholder in more than one professional corporation?
Yes, Nurse Practitioner be a shareholder in more than one Professional Corporation.
Do I have to follow any Namestyle formalities when I form my Nursing Practitioner corporation?
Name of the corporation must comply with the California Business and Professions Code 2778.
The name of a Nurse Practitioner corporation and any name or names under which it may render professional services shall contain the words “Nursing” or “registered Nursing,” and wording or abbreviations denoting corporate existence.
- The name of a Nursing corporation and any name or names under which it may render professional services shall contain the words “Nursing” or “registered Nursing,” and wording or abbreviations denoting corporate existence.
The California Board of Registered Nursing does not prohibit using a fictitious name or a “DBA”.
Do I need a Certificate of Registration as a Nurse Practitioner Corporation
No. Any professional corporation or foreign professional corporation rendering professional services by persons duly licensed by the Board of Registered Nursing shall not be required to obtain a certificate of registration in order to render those professional services.
Can anyone serve as an officer of director of a Nurse Practitioner corporation?
- Except as provided in Sections 13401.5 and 13403 of the Corporations Code, each shareholder, director and officer of a nursing corporation, except an assistant secretary and an assistant treasurer, shall be a licensed person as defined in Section 13401 of the Corporations Code.
These offices are dependent on the number of shareholders of the Nurse Practitioner corporation.
A Nurse Practitioner corporation which has only one shareholder need 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 situation need not be licensed persons.
A Nurse Practitioner corporation which has only two shareholders need 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.
What is Happening with AB 890?
On September 29, 2020, Governor Gavin Newsom signed AB 890 into law after it passed through both houses of the California Legislature with broad bipartisan support.
With AB 890, California took an important step to expand access to care and to address primary care workforce shortages which creates a pathway for nurse practitioners (NPs) to treat patients independently (meaning the NP does not have to be supervised by a physician). This allows NPs to work without physician supervision, removing the supervisory requirement in existing law so NPs can provide the same high quality care they do today and care more directly for patients.
Throughout the legislative process, many worked tirelessly to bring to the forefront the severe and growing provider shortage in California and the important role NPs play in closing the health care gap by delivering quality health care for millions of Californians.
More than half of US states already allow NPs to practice independently. Research shows that access to primary care is better in these states and that the quality of primary care provided by NPs is similar to care delivered by physicians.
It is important to note that as of late 2022, there remain many intricacies of this law, that still need to be worked out. AB 890 delegated to the California Board of Registered Nursing (BRN) the authority to establish the minimum amount of clinical experience and mentorship that an NP must receive before being allowed to practice independently (referred to as a transition-to-practice [TTP] period).
As of July 2022, the BRN has not released draft regulations, which could result in a delay of AB 890’s January 1, 2023, implementation date.
What is Happening with SB 1375?
In 2022, California Senate pro Tempore Toni Atkins introduced SB 1375, which clarifies the TTP requirement by specifying that an NP with at least three full-time equivalent years or 4,600 hours of experience can practice independently. SB 1375 will allow qualified NPs to begin practicing independently in 2023 who otherwise may be delayed, given the timeline of the AB 890 regulations.
Is there a great resource to find the California Laws and Regulations related to the Practice of Psychology in a professional Nurse Practitioner Corporation?
Yes, you can find the 2018 guide here: Coming soon!
Client Question:
Can family nurse practitioners open and own their own practices in California? I understand we need a standardized protocol and must collaborate with a physician, but can we own the practice and hire a physician? Would we be able to make a profit?
Let me provide the whole background for reference.
I recently graduated from nursing school in June and moved myself down to Chino California (greater LA area). I tried to find a suitable associate position but having 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 an accountant to help me decide on what kind of business entity I want to be, every local nurse practitioner that I have asked has only told me how much they hate their accountant 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 of a 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 NP 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 nurses 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 nurse practitioner clinic, and did you form your company online or through an attorney?
More coming soon!
Laws Governing Nurse Practitioner Professional Corporation
The following are the laws that govern nurse practitioner professional corporation.
Corporations Code
13401.5. Notwithstanding subdivision (d) of Section 13401 and any other provision of law, the following licensed persons may be shareholders, officers, directors, or professional employees of the professional corporations designated in this section 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 professional corporation so designated herein, and so long as the number of those licensed persons owning shares in the professional corporation so designated herein does not exceed the number of persons licensed by the governmental agency regulating the designated professional corporation. This section does not limit employment by a professional corporation designated in this section to only those licensed professionals listed under each subdivision. Any person duly licensed under Division 2 (commencing with Section 500) of the Business and Professions Code, the Nursing Act, or the Osteopathic Act may be employed to render professional services by a professional corporation designated in this section.
Nursing corporation.
(1) Licensed physicians and surgeons.
(2) Licensed doctors of podiatric medicine.
(3) Licensed psychologists.
(4) Licensed optometrists.
(5) Licensed marriage and family therapists.
(6) Licensed clinical social workers.
(7) Licensed physician assistants.
(8) Licensed nurses.
(9) Licensed acupuncturists.
(10) Naturopathic doctors.
(11) Licensed professional clinical counselors.
13403. The provisions of the General Corporation Law shall apply to professional corporations, except where such provisions conflict with or inconsistent with the provisions of this part. A professional corporation which has only one shareholder need 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 situation need not be licensed persons. A professional corporation which has only two shareholders need 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.
A professional medical corporation may establish in its articles or bylaws the manner in which its directors are selected and removed, their powers, duties, and compensation. Each term of office may not exceed three years. Notwithstanding the foregoing, the articles or bylaws of a professional medical corporation with more than 200 shareholders may provide that directors who are officers of the corporation or who are responsible for the management of all medical services at one or more medical centers may have terms of office, as directors, of up to six years; however, no more than 50 percent of the members of the board, plus one additional member of the board, may have six-year terms of office.
Business and Professions Code
2775. A Nursing corporation is a corporation which is authorized to render professional services, as defined in Section 13401 of the Corporations Code, so long as that corporation and its shareholders, officers, directors, and employees rendering professional services who are registered nurses are in compliance with the Moscone-Knox Professional Corporation Act, the provisions of this article and all other statutes and regulations now or hereafter enacted or adopted pertaining to such corporation and the conduct of its affairs.
With respect to a Nursing corporation, the governmental agency referred to in the Moscone-Knox Professional Corporation Act is the Board of Registered Nursing.
2776. It shall constitute unprofessional conduct and a violation of this chapter for any person licensed under this chapter to violate, attempt to violate, directly or indirectly, or assist in or abet the violation of, or conspire to violate any provision or term of this article, the Moscone-Knox Professional Corporation Act, or any regulations duly adopted under those laws.
2777. A Nursing corporation shall not do or fail to do any act the doing of which or the failure to do which would constitute unprofessional conduct under any statute or regulation, now or hereafter in effect. In the conduct of its practice, it shall observe and be bound by such statutes and regulations to the same extent as a person holding a license under this chapter.
2778. The name of a Nursing corporation and any name or names under which it may render professional services shall contain the words “Nursing” or “registered Nursing,” and wording or abbreviations denoting corporate existence.
2779. Except as provided in Sections 13401.5 and 13403 of the Corporations Code, each shareholder, director and officer of a Nursing corporation, except an assistant secretary and an assistant treasurer, shall be a licensed person as defined in Section 13401 of the Corporations Code.
27780. The income of a Nursing corporation attributable to professional services rendered while a shareholder is a disqualified person, as defined in Section 13401 of the Corporations Code, shall not in any manner accrue to the benefit of such shareholder or his or her shares in the Nursing corporation.
2781. The board may adopt and enforce regulations to carry out the purposes and objectives of this article, including regulations requiring (a) that the bylaws of a Nursing corporation shall include a provision whereby the capital stock of such corporation owned by a disqualified person (as defined in Section 13401 of the Corporations Code), or a deceased person, shall be sold to the corporation or to the remaining shareholders of such corporation within such time as such regulations may provide, and (b) that a Nursing corporation shall provide adequate security by insurance or otherwise for claims against it by its patients arising out of the rendering of professional services.
Can a Nurse Practice in the Healing Arts?
2017 California Code Business and Professions Code – BPC
DIVISION 2 – HEALING ARTS
CHAPTER 6 – Nursing
ARTICLE 8 – Nurse Practitioners
Section 2836.
- (a) … any person who practices or attempts to practice, or who advertises or holds himself or herself out as practicing, any system or mode of treating the sick or afflicted in this state, or who diagnoses, treats, operates for, or prescribes for any ailment, blemish, deformity, disease, disfigurement, disorder, injury, or other physical or mental condition of any person, without having at the time of so doing a valid, unrevoked, or unsuspended certificate as provided in this chapter or without being authorized to perform the act pursuant to a certificate obtained in accordance with some other provision of law is guilty of a public offense, punishable by a fine not exceeding ten thousand dollars ($10,000), by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code, by imprisonment in a county jail not exceeding one year, or by both the fine and either imprisonment.
(b) Any person who conspires with or aids or abets another to commit any act described in subdivision (a) is guilty of a public offense, subject to the punishment described in that subdivision.
- Nothing in this chapter shall be construed as limiting the practice of other persons licensed, certified, or registered under any other provision of law relating to the healing arts when such person is engaged in his or her authorized and licensed practice.
Forming Your Nurse Practitioner Professional Corporation: Our Legal Experts Have Your Back!
Nursing is a rewarding profession especially if you level up, form a nurse practitioner professional corporation and start a private practice. However, before you move to the next chapter of your career, learn about the whole process first to ensure you don’t waste your precious time and effort.
If your mind is already set on making it big in your field, do it right by seeking the assistance of an incorporation expert, such as Incorporation Attorney. We will help you with any questions you may have about the incorporation process and requirements in California. Our seasoned incorporation attorneys will take care of everything so you can focus on building your private practice’s name.
To get started, all you need to do is get in touch with us immediately. Call today to set an appointment!
