If you’re an acupuncturist in California, you SHOULD form a Professional Corporation taxed as an S-Corporation.
If you’re an acupuncturist, you’re prohibited from forming an LLC or a traditional corporation for your acupuncture practice and instead must register as a Professional Corporation.
If done incorrectly, your Professional Corporation can be rejected by the Secretary of State, leaving you vulnerable to potential lawsuits and fines from various government agencies, and even the California State Board.
As a Business Lawyer for Professionals, I’m assisted hundreds of professionals just like you start their Professional Corporation and I can definitely help you start yours.
What is an Acupuncture Corporation
A Acupuncture Corporation is a professional corporation which is registered with the California Secretary of State and the Acupuncture Board.
In California, all professional corporations must be registered with the corresponding government agency that is tasked to manage their profession.
3 Steps to Starting An Acupuncture Corporation
The 3 steps to starting a Professional Acupuncture Corporation are:
- File the Articles of Incorporation of a Professional Corporation with the Secretary of State to form the Professional Corporation
- Notify your Profession’s state agency that manages your profession, hold a Board of Director’s Meeting and appoint directors, get your Professional Corporation Bylaws drafted, apply for your EIN, file your Statement of Information, file
- Form 2553 for S-Corporation tax election, pay California corporate taxes to the California Franchise Tax Board, register with the EDD if you will be hiring employees, and apply for local business registration and licenses.
Do all the steps above yourself or hire a Business Lawyer to do everything for you.
Benefits Of Starting A Professional Acupuncture Corporation
Incorporating a professional acupuncture corporation in California will limit your personal liability against creditors and lawsuits, minimize the self-employment taxes of the shareholders, allow you to build corporate business credit, and much more.
Name Requirement For A Professional Acupuncture Corporation
The professional acupuncture corporation’s name must include either “acupuncture” or “acupuncturist”.
It must also include a corporate ending such as: “A Professional Corporation”, “Professional Corporation”, “APC”, “A.P.C.” “PC”,”P.C.”,”Prof. Corp.”,”Inc.”, “Incorporated”, “Corporation”, “A California Professional Corporation” or words or abbreviations which denote its corporate existence.
Also, “LLC” is not permitted as a corporate designation, and California does not certify an “LLC” for the purposes of practicing acupuncture, based on underlying Corporate Code concerning Professional Corporations.
Who Can Be A Shareholder Of The Professional Acupuncture Corporation?
At least 51 percent of the shares must be owned by the chiropractor. The remaining 49 percent may be owned by Licensed physicians and surgeons, Licensed doctors of pediatric medicine, Licensed psychologists, Registered nurses, Licensed optometrists, Licensed marriage and family therapists, Licensed clinical social workers, Licensed physicians assistants, licensed chiropractors, Naturopathic doctors, Licensed professional clinical counselors, and Licensed midwives.
The number of licensed persons cannot exceed the number of acupuncturists, and cannot exceed a combined share total of 49 percent.
Any shares issued to others who do not are not the professionals listed above are void. Also, shares in the acupuncture corporation may only be transferred to those who are licensed to practice registered acupuncture medicine, to a shareholder of the corporation or to the professional acupuncture corporation itself. If a shareholder becomes ineligible to practice acupuncture in California or is legally disqualified from rendering professional services to the Professional Acupuncture Corporation, she must sell or transfer her shares to a qualified shareholder within 90 days of her ineligibility or disqualification.
Can An Acupuncture Corporation Be Opened As An LLC In California?
A acupuncture corporation CANNOT be opened as an LLC in California. The California Corporations Code does not certify LLCs (Limited Liability Companies) for the purpose of practicing acupuncture.
For a acupuncturists to provide professional services in California, they must open a Professional Corporation.
Can An Acupuncture Corporation Use a DBA Or Fictitious Name?
In California, an acupuncture corporation can use a fictitious name so long as they file a fictitious business name statement within 40 days of starting the acupuncture corporation.
You must also make a fictitious name filing in every local county recorder’s office for which you are practicing.
How To Start a California Acupuncture Corporation
Here are the 10 steps you must take to start a Professional Acupuncture Corporation:
- File the Articles of Incorporation with Secretary of State and pay the filing fee. The filing fee is currently $100. You must also state within its Articles of Incorporation that its purpose is “Acupuncture”.
- Register the Corporation with the Acupuncture Board by providing the Board with an original proof of your Articles of Incorporation from the Secretary of State.
- Conduct a corporate meeting where you will issue shares and elect officials and directors for the Professional Acupuncture Corporation
- Create Acupuncture Corporation bylaws
- Apply for an EIN
- File the Statement of Information with the Secretary of State
- File Form 2553 for S-Corporation Tax Election for the Professional Acupuncture Corporation
- Pay California Corporate Taxes and Fees to the California Franchise Tax
- Register with the EDD if you will be hiring employees
- Apply for local business registration and licenses
What To Do Next
While these following these steps above might seem straight forward, one mistake while creating your Professional Corporation can cause your corporation to be rejected by the Secretary of State, costing you money and time.
As a Business Lawyer for Professionals, I’ve assisted hundreds of professionals just like you start their California Acupuncture Corporations and I can definitely help you with yours.
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