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by Sam Mollaei
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When you begin a nursing professional corporation in California, feeling excited and nervous is normal. The excitement comes from years of hard work and finally reaching this milestone in your career.
However, the nervousness might come from not knowing the steps to take, what forms to file, or what the process involves.
In this article, we’ll address many nurses’ first questions when starting their professional corporation in California: Who can be a shareholder in your California nursing professional corporation?
Who Can Be a Shareholder in a Nursing Professional Corporation?
Knowing that only some people can start a nursing professional corporation in California is essential. There are strict rules about who can own one. Registered nurses in California must own at least 51 percent of the corporation. Certain licensed professionals in the healthcare field can own the other 49 percent.
According to California Corporations Code Section 13401(b), (d), shareholders of California Professional Corporations must be licensed individuals. They must hold a license to practice the specific profession of the corporation.
However, there’s an exception for Nursing Professional Corporations, as stated in Section 13401.5(f).
Under California Corporations Code Section 13401.5(f)(1)-(12), in addition to licensed nurses, the following licensed professionals can also be shareholders of a California Nursing Professional Corporation:
- Licensed physicians and surgeons. (Section 13401.5(f)(1))
- Licensed doctors of podiatric medicine. (Section 13401.5(f)(2))
- Licensed psychologists. (Section 13401.5(f)(3))
- Licensed optometrists. (Section 13401.5(f)(4))
- Licensed marriage and family therapists. (Section 13401.5(f)(5))
- Licensed clinical social workers. (Section 13401.5(f)(6))
- Licensed physician assistants. (Section 13401.5(f)(7))
- Licensed chiropractors. (Section 13401.5(f)(8))
- Licensed acupuncturists. (Section 13401.5(f)(9))
- Naturopathic doctors. (Section 13401.5(f)(10))
- Licensed professional clinical counselors. (Section 13401.5(f)(11))
- Licensed midwives. (Section 13401.5(f)(12))
These other licensed professionals cannot outnumber the nurse shareholders and may not own more than 49% of the total shares in the California Nursing Professional Corporation.
What are the Benefits of Professional Nursing Corporation in California?
A Professional Corporation (PC) is usually the best and most efficient way to run a nursing business in California. Some key benefits of operating a nursing services business as a professional nursing corporation include:
Tax Savings
Starting a Nursing Professional Corporation can help save money on taxes. You can take advantage of different tax deductions unavailable to individuals. This means you might keep more of your hard-earned cash.
Liability Protection
A Nursing Professional Corporation also provides liability protection. Your assets, like your house or car, are safe if something goes wrong at work. Only the corporation’s assets are at risk. This can give you peace of mind and let you focus on providing great care to your patients.
What to Consider When Starting a Professional Nursing Corporation
Are you a registered nurse thinking about starting a business in California? It’s crucial to set up your business correctly to avoid serious issues.Also, PC must follow moscone-knox professional corporation act to render professional services like nursing practice.
Here are some key points to consider when establishing a professional nursing corporation in California.
Name
Choosing the right name for your Nursing Professional Corporation is important. The name should clearly show it is a nursing corporation. Make sure it follows California’s naming rules. The name must include “Professional Corporation” or “PC” to show it is a professional business.
Tax Implications
Understanding the tax implications is crucial. A Nursing Professional Corporation can save you money on taxes. You can use various tax deductions and benefits unavailable to individual nurses. It’s a good idea to talk to a tax professional to ensure you get all the benefits and follow the rules.
Ownership Structure
The ownership structure of your Nursing Professional Corporation is also vital. Registered nurses in California must own at least 51% of the corporation. Certain licensed health professionals can own the other 49%. Make sure you follow these rules to keep your corporation in good standing.
Forming a new business can be complex, especially in a regulated field like healthcare. You don’t have to go through the process alone. An experienced California business formation lawyer for nurses can provide valuable assistance.
FAQ
According to California Corporations Code Section 13403, a California Nursing Corporation with only one shareholder requires just one director, who will be that shareholder.
Similarly, a California Nursing Corporation with only two shareholders needs only two directors to be those shareholders.
According to California Corporations Code Section 13403, if a California Nursing Corporation has only one shareholder, that shareholder must also serve as the president and treasurer of the corporation.
The other officers in such a scenario do not need to be licensed individuals.
Similarly, under California Corporations Code Section 13403, if a California Nursing Corporation has only two shareholders, these shareholders must collectively fill the roles of president, vice president, secretary, and treasurer within the corporation.
California Corporations Code Sections 202(b)(1)(B), (b)(4), and 13404 outline the purposes of California Professional Corporations.
The purpose statement for a California Professional Nursing Corporation should state, “The corporation’s purpose is to practice nursing and conduct any lawful activities (excluding banking or trust company business) not prohibited to corporations in this profession by relevant laws and regulations.
This corporation is classified as a professional corporation under California Corporations Code sections 13400 et seq.”
Additionally, a California Professional Nursing Corporation may engage in other activities approved by the California Department of Consumer Affairs and the California Board of Registered Nursing, as permitted by California Corporations Code Sections 13401(b) and 13404.
Summing Up
Shareholders in a Nursing Professional Corporation must be licensed professionals, primarily registered nurses in California.
They play a crucial role in owning and managing the corporation. Other licensed healthcare professionals may also own shares but cannot outnumber the nurse shareholders or exceed 49% ownership.
This structure ensures that the corporation adheres to California’s regulations while allowing qualified professionals to participate in the ownership and governance of the corporation.
Sam Mollaei is an experienced attorney with the necessary skills, knowledge, and legal expertise to assist you in establishing a professional nursing corporation in California. If you have inquiries regarding your rights, obligations, or available choices, we encourage you to contact us for a confidential consultation.
