If only investing in a corporation was as simple as giving the money to acquire your share of profit.
Legal factors are tied to each and all steps of the decision-making procedures. The most common mistake a person can make is not consulting with a lawyer in a similar field.
Owning Medical Practice by A Non-Doctor in California
Suppose you are a businessman with an idea to open a medical practice in California. You visit the local business lawyer and ask for legal advice.
Your goal is to own the medical practice while your hypothetical partner, a doctor, is the equal shareholder.
It is not like splitting an apple in half to share equally between the two. The lawyer will tell you that California law is different, though it may seem unfair.
What California Law Says
Assuming you are a business person with no license in any health occupation, you cannot become the sole owner of medical practice.
In short, a non-doctor is prohibited from owning a medical corporation in the State of California.
Let us give you an example where a businessman asks a legal advisor if he can take over the medical practice that was established with a surgeon partner.
He is a 25% shareholder of the practice and has no medical background.
The answer is a straightforward no because first, he holds less than 51% of shares, and second, he is not a licensed doctor.
Why California Law Has Made This Decision
There are certain ethics and protocols a licensed physician abides by that lead to mutual agreement between a doctor and a patient.
A business person who is not a doctor cannot make certain judgment calls regarding healthcare or decide on various factors that a physician makes when following medical codes.
Other facets can also interfere with a physician by an unlicensed person. We have listed some examples below:
- The number of hours a physician works
- How many patients to check per hour
- Who to hire and give notice based on the clinical duties
- Medical equipment and supplies acquiring
- Insurance contract details
- Patient bill process and so on.
Then, Who Can Own A Medical Practice in California?
The simplest way to know who can own medical practice in California is by the professional background approved (license) by the Medical Board of California.
1. Professionals Who Must Hold 51% of Shares in Medical Practice
Being a 51% shareholder in the medical practice means that you are legally the owner of the corporation. Just make sure you have one of the following professions with a license:
- Surgeons and physicians
- Doctors or podiatric medicine
2. Professionals Who Can Hold Up to 49% of Shares in Medical Practice
The second partner in the professional medical corporate can be a non-physician, as long as the person is skilled in a different medical occupation.
Furthermore, the owner or the 49% of the shareholder can be one or more individuals with a license. They are known as allied medical professionals:
- Clinical social workers
- Marriage and family therapists
- Professional clinical counselors
- Registered nurses (RN)
- Naturopathic doctors
So what happens to the business person with 25% of shares? He may be a capable businessman to be a shareholder in the medical practice after investing.
However, he is not eligible to invest more for being a non-doctor. His general provisions based on the expertise will be toward administrative services.
Also, he cannot partake in the profits procured by the surgeon’s medical practice.
To sum up, can a non doctor own a medical practice in California? No, because he/she does not have a medical license to be a physician or a surgeon.
While you can learn further about the topic from an attorney/lawyer, it is better to know the basic legal regulation followed in California State regarding medical practice.
Start Your Online Business Today
Join 4,680+ Entrepreneurs Who Have Successfully Started Their Online Business So You Can Work Anywhere In The World And Be Your Own Boss