More About Professional Corporations
More About Professional Corporations
Physician assistants in California can pursue being an entrepreneur without leaving the profession that they love. They can start their own professional corporation. Incorporation Attorney provides a comprehensive guide for physician assistants to form their own Physician’s Assistant Professional Corporation.
What is a Professional Physician Assistant Corporation?
A physician assistant corporation is a type of professional corporation that is officially registered with the California Secretary of State and is engaged in rendering the professional services of physician assistants.
What about a Professional Medical Corporation?
When researching, you most likely have found that medical professionals can also form a Professional Medical Corporation. But can a PA form a Professional Medical Corporation in California? What about the PA Professional Corporation being a shareholder (as compared to the PA themselves).
The short answer, no. We break this down more below in a question from one of our clients.
CLIENT QUESTION: Thank you for taking my call yesterday and discussing options for corporations. I want to discuss the physician assistant corporation being the majority owner of a professional medical corporation. Is there any reason why we would not use a professional medical corporation and make the physician assistant corporation an owner, rather than being an owner of the physician assistant corporation?
ANSWER: A physician’s assistant corporation cannot be the majority shareholder in a professional medical corporation. It is not permitted by law. Learn more about what options you do have to be a shareholder as a physician assistant, dive into the full question and answer here.
Are there Government Agencies that Regulate Professional Physician Assistant Corporations?
Yes. The Department of Consumer Affairs – Physician Assistant Board is the agency that regulates physician assistant corporations in California.
What are the California State Laws that regulate the formation of a Professional Physician Assistant Corporation?
Professional Physician Assistant Corporations must abide by the following laws:
- California Corporations Code – 13401.5
- Business and Professions Code – Physician Assistants Corporations is located in the California Business and Professions Code starting with Section 3540.
- California Code of Regulations – Title 16, Division 13.8, Physician Assistant Board
What are the Qualifications to be Stockholder in a Professional Physician Assistant Corporation in California?
The following licensed persons may be shareholders, officers, directors, or professional employees of the Professional Physician Assistant 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 Physician Assistant corporation, and so long as the number of those licensed persons owning shares in the physician assistant 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 physician assistant corporation to only those licensed professionals listed.
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- Licensed physicians and surgeons.
- Registered nurses.
- Licensed acupuncturists.
- Naturopathic doctors.
- Licensed midwives.
Can a Physician Assistant be a shareholder in more than one Professional Corporation?
Yes. Physician assistants in California are allowed to own shares in more than one professional corporation.
Quote from one of our recent Physician’s Assistant clients who needed assistance setting up her corporation here in California
Are There Namestyle Formalities That Need to Be Followed When Forming a Professional Physician Assistant Corporation in California?
The name of the physician assistant corporation must comply with the California Business and Professions Code 3543. Its business name and any name or names under which it may render professional services must contain the words “physician assistant,” and wording or abbreviations denoting corporate existence.
Are Professional Physician Assistant Corporations in California Allowed to Use Fictitious Business Names?
Yes. Professional physician assistant corporations are allowed to use “Doing Business As” names. The Physician Assistant Board does not prohibit the use of fictitious business names.
Do I Need a Certificate of Registration as a Professional Physician Assistant Corporation?
No. Professional corporations or foreign professional corporations rendering professional services by persons duly licensed by the Board of Registered Physician Assistants are not required to obtain a certificate of registration to render their professional services.
Can Anyone Serve as an Officer or Director of a Professional Physician Assistant Corporation?
These offices are dependent on the number of shareholders of the physician assistant corporation.
A professional physician assistant 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 situation need not be licensed persons.
A professional physician assistant corporation that has only two shareholders need to have only two directors who shall be such shareholders. The two shareholders between them shall fill the offices of the president, vice president, secretary, and treasurer.
Must a California Physician Assistant be concerned about a “Practice Agreement”?
In a significant development for California physician assistants, amendments to the California Business and Professions Code Section 3500 et seq., effective from January 1, 2020, have simplified the supervision requirements for PAs. The changes have replaced the “delegation of services agreements” with “practice agreements,” which apply to the entire healthcare system. This means any supervising physician within the system can oversee any PA subject to the agreement, reflecting current industry practice and streamlining the supervisory process.
The amendments also impact the formation of a California professional physician assistant corporation. These corporations must contain the words “physician assistant” in their name. The changes in California law have made it easier for PAs to practice and have ownership in their professional corporations. However, starting a professional physician assistant corporation must still adhere to specific requirements.
Is there a Resource to find the California Laws and Regulations That Relate to the Practice of the Physician Assistant in a Professional Corporation?
Yes. The 2022 guide is found here:
California Physician Assistants Laws & Regulation Booklet
Client Question: I recently graduated in August and moved down to San Francisco, 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 an accountant to help me decide on what kind of business entity I want to be, every local Physician Assistant (“PA”) 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 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 PA 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 physician assistants 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 did you form your company online or through an attorney?
The best decision to make is to work with a corporate attorney that specializes in forming professional physician corporations in California. By working with an experienced lawyer, you can be sure than all your questions will be answered.
A dependable corporate lawyer will help you understand how a professional corporation is the correct entity for your physician assistant service, assist you through the process of forming the professional physician corporation in California, and be available for you when you need legal and corporate advice.
The best option for physician assistants setting up a small clinic and running it as a one physician assistant operation would be to form a professional physician assistant 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 medical conditions by using some online service like YouTube or Google, the most reasonable thing for a person to do is turn it over to a professional like a physician assistant. 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 it out how to do it online. Just to simply avoid the problems that you will run into with Department of Consumer Affairs – The Physician Assistant Board will make the investment in using a professional to form your corporation well worth the money.
Frequently Asked Questions
Q: What is a professional physician assistant corporation in California?
A: A professional physician assistant corporation is a type of corporation that is exclusively formed by licensed physician assistants in California to offer their services to the public.
Q: Can physician assistants start their own professional corporation in California?
A: Yes, physician assistants can start their own professional physician assistant corporation in California as per the Moscone-Knox Professional Corporation Act of the state.
Q: What are the benefits of forming a professional physician assistant corporation in California?
A: Forming a professional physician assistant corporation in California provides several advantages, including limited liability protection, pass-through taxation, and the ability to attract new clients.
Q: How do physician assistants form a corporation in California?
A: Professional physician assistants can form a corporation in California by filing the Articles of Incorporation with the California Secretary of State and complying with other legal requirements under the Moscone-Knox Professional Corporation Act.
Q: What legal requirements do physician assistants have to meet before forming a corporation in California?
A: Physician assistants have to meet several legal requirements before forming a corporation in California, including obtaining a certificate of registration from the Medical Board of California, obtaining a tax identification number, and filing the Articles of Incorporation with the Secretary of State.
Q: What is limited liability protection, and how does it benefit professional physician assistant corporations in California?
A: Limited liability protection is a legal concept that limits the personal liability of physician assistants for the debts and obligations of their corporation. This benefit provides protection to corporate owners and their assets in the event of unforeseen lawsuits or judgments.
Q: Does a professional physician assistant corporation have to pay California franchise tax?
A: Yes, a professional physician assistant corporation in California must pay the California franchise tax.
Q: Can a professional physician assistant corporation offer medical services directly to the public?
A: A professional physician assistant corporation can offer medical services directly to the public under the Moscone-Knox Professional Corporation Act.
Q: What is the role of the Medical Board of California in regulating professional physician assistant corporations?
The Department of Consumer Affairs – Physician Assistant Board is the agency that regulates physician assistants corporations in California. The Medical Board of California (the, “MBA”) is responsible for regulating and overseeing the licensure and practice of physicians. The MBA also provides guidance with general inquiries regarding the corporate practice of medicine to ensure compliance while avoiding complaints about the practice of medicine in the state.
Q: Are there any restrictions on forming a California professional physician assistant corporation?
A: Yes, there are several restrictions on forming a California professional physician assistant corporation, including (1) the who can own shares in a physicians assistant corporation, (2) how the corporation can be named, (3) who can be a director and officer and more.
California Corporate Attorney That Specializes in Forming Professional Physician Assistant Corporation
Incorporation Attorney has years of experience in helping physician assistants in California start their own corporation as a professional physician assistant corporation. Our team of experts can assist you from the preparation of documents and requirements to the establishment of company bylaws. We will be with you every step of the way! Contact us today at +1 (714) 634-4838.
