Nowadays, more and more medical professionals opt to start their own professional medical corporation but are unsure about the steps, to begin with as regards to its formation process. Included in the process of forming a medical corporation is deciding on a business name. In this article, we discuss the name requirements for professional medical corporations in California. Learn about these requirements from our expert corporation attorneys!

Forming a California Professional Corporation: Name Requirements

1. What is a Professional Medical Corporation? 

A professional medical corporation is a corporation regulated by California state law which legalizes physicians to practice their profession in a business entity. Just like any professional corporation, it has its own limitations and restrictions as to its formation process. One of the first things to consider in opening up a professional medical corporation is providing a legitimate name style because it’s a prerequisite to drafting the articles of incorporation.  

For medical practitioners, forming their own professional medical corporation has more advantages in relation to legal medical practices compared to sole-proprietorships or medical partnerships, but the corporate formation process can be lengthy and devious. It has a lot of compliances and requirements that’s why it is always highly advised to hire an experienced corporate attorney to do all the tricky work. 

In California, it is important to note that setting up a business that provides professional services through a corporate structure should be registered as a professional corporation and not as a Limited Liability Company (LLC). This means these types of professional corporations can be and are usually owned and operated by shareholders who practice their specific medical licenses.  

Read more about the steps in forming a professional medical corporation here! 

2. What are the First Steps in Starting A Professional Medical Corporation? 

A professional corporation should draft out its articles of incorporation before anything else. And this can only happen by choosing a name for the corporation first. While it sounds fairly easy to brainstorm for names for your professional corporation, there are legal restrictions that limit the name options.  

Unlike general stock corporations which give business owners the freedom to choose any name as long as it’s not something generally misleading to the public or a name that sounds like another existing corporate name, professional medical corporations have their name requirements regulated by California incorporations code, the business and professions code, the California code of regulations, and the specific state regulatory agency that issues their professional medical license for practice. The chosen corporate name will go through the approval of all these codes and agency rules. Our corporate attorneys have handled and re-drafted countless corporate accounts just because they didn’t follow the name style requirements of their corporate medical profession.  

Why Should You Follow the Name-style Regulations for Your Professional Medical Corporation?  

It is important to note that these state regulatory agencies take their rules very strictly and consider any incompliance to them as unprofessional conduct. Although there are still several existing professional corporations who do not follow the regulated business name ideas, it is as simple as it does not matter whether other business entities comply to or not, but rather when your company has been caught to be incompliant of the state codes and regulatory agencies, you will be penalized accordingly. So, it is better to be safe and sure rather than always being under the radar for not following simple basic regulations for medical business name ideas.  

What are The Name Style Rules of Professional Medical Corporations?  

A professional medical corporation that is owned and operated by physicians and/or pediatrists, should have its corporate name limited to the surname of any one or more of the owners and shareholders of the business along with its abbreviations signifying its corporate existence. Professional medical corporations require corporate designation right after their chosen name style to signify them as a corporate business entity. These are some of the basic differences and name requirements with general stock corporations that do not require words like “corporation” or “incorporated” that indicate their corporate designation.  

Following its corporate abbreviation, a professional medical corporation can also opt not to use their surname for their name style. However, a professional corporation run by a majority of practicing physicians and surgeons as shareholders, officers, and directors is. So, this means surgeons and physicians as shareholders cannot name their corporate business as “pediatric corporation” in the same way pediatrists cannot name their business as “medical corporation”.  

Can a Professional Medical Corporation be Under a Fictitious Name? 

If, for instance, a professional corporation decides to do something different for their medical business name idea, there is a permit that allows them to use any fictitious, false, or assumed name or any name other than the name or surname of anyone or more of the shareholders. This permit can be obtained from the California medical board. So yes, a professional medical corporation can be filed under a fictitious name following the compliance of its permits. Moreover, it is important to note that this permit is not the same as the DBA filing from the local county government as most business owners get confused with this mistake.   

As an example, Alex Anderson Medical Corporation or Alex Anderson MD Incorporated is a perfect example of a professional medical business name idea that follows the surname of one of the shareholders of the business. As long as the name Alex Anderson is the same legal name found in their professional medical license.  

Establish Your Professional Medical Corporation Through Getting the Right Business Name Idea 

As we have only tackled the first few steps in starting up your own professional medical corporation, it is evident that the processes are very tedious and lengthy. We’ve discussed the name requirements for professional medical corporations in California, but this is only a small part of the steps in forming a corporation. To know more about the next processes in forming a professional medical corporation in California, it is best to consult an attorney that specializes in establishing professional corporations. 

If you are a medical practitioner or an individual who wants to start up his own corporate medical business, we can help you build your dream company with all the correct legal action! Call us now at +1 (714) 634-4838 and talk to one of our expert corporate attorneys!