If you’re a chiropractor, you SHOULD form a Chiropractic Corporation taxed as an S-Corporation.
If you’re a chiropractor, you’re prohibited from forming an LLC or a traditional corporation for your chiropractic 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’ve assisted hundreds of professionals just like you start their Professional Corporation and I can definitely help you start yours.
A Professional Chiropractic Corporation is a professional corporation which is registered with the California Secretary of State and the California State Board of Chiropractic Examiners.
In California, all professional corporations must be registered with the corresponding governmental agency that is tasked to manage their profession. Professional Chiropractic Corporation must hold a certificate of registration from the California State Board of Chiropractic Examiners.
3 Steps to Starting a Chiropractic Corporation
The 3 steps to starting a Chiropractic 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 a Chiropractic Corporation
Incorporating a Professional Chiropractic 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.
Learn more about the benefits of a professional corporation here.
Name Requirements of a Chiropractic Professional Corporation
The Professional Chiropractic Corporation’s name must contain the name or the last name of one or more of the present, prospective, or former shareholders, and include the word “chiropractic”. 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 chiropractic treatment, based on underlying Corporate Code concerning Professional Corporations.
Who Can Be a Shareholder Of a Chiropractic Professional 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 acupuncturists, Naturopathic doctors, Licensed professional clinical counselors, and Licensed midwives.
The number of licensed persons cannot exceed the number of chiropractors, 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 Professional Chiropractic Corporation may only be transferred to those who are licensed to practice registered chiropractic medicine, to a shareholder of the corporation or to the Professional Chiropractic Corporation itself.
If a shareholder becomes ineligible to practice chiropractic medicine in California or is legally disqualified from rendering professional services to the Professional Chiropractic Corporation, she must sell or transfer her shares to a qualified shareholder within 90 days of her ineligibility or disqualification.
Can a Chiropractic Corporation Be Opened As An LLC In California?
A Chiropractic 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 chiropractic medicine. For a chiropractor to provide professional services in California, they must open a Professional Corporation.
Can a Professional Chiropractic Corporation Use a DBA Or Fictitious Name?
In California, a Professional Chiropractic Corporation cannot use a fictitious name or DBA for the Corporation.
How To Form A Professional Chiropractic Corporation in California
Here are the 10 steps you must take to form the Professional Chiropractic 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 “Chiropractic Medicine”.
- Register the Corporation with the California State Board of Chiropractic Examiners 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 Chiropractic Corporation
- Create custom Professional Chiropractic 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 Chiropractic 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 Professional Chiropractic Corporation and I can definitely help you with yours.
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