If you’re a licensed optometrist, you SHOULD form an Optometric Professional Corporation taxed as an S-Corporation.
If you’re an optometrist, you’re prohibited from forming an LLC or a traditional corporation for your optometric 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.
Optometric Professional Corporation
A Professional Optometric Corporation Corporation is a professional corporation which is registered with the California Secretary of State and the California State Board of Optometry.
In California, all professional corporations must be registered with the corresponding governmental agency that is tasked to manage their profession. California Professional Optometric Corporations must hold a certificate of registration from the California State Board of Optometry.
3 Steps to Starting an Optometric Corporation
The 3 steps to starting an Optometric Professional 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 an Optometric Professional Corporation
Incorporating a Professional Optometric 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 Requirements of a Optometric Professional Corporation
The Professional Optometric Corporation’s name must include the optometrist’s name or the last name of one or more of the present, prospective, or former shareholders. It must also include a corporate ending such as: “Optometric Corporation”, “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.
If the name of a shareholder is used, and the shareholder dies or is not a shareholder any longer, the articles of incorporation must be amended to delete the name of the former shareholder within two years.
Also, “LLC” is not permitted as a corporate designation, and California does not certify an “LLC” for the purposes of practicing Optometry, based on underlying Corporate Code concerning Professional Corporations.
Who Can Be a Shareholder Of The Professional Optometric Corporation?
At least 51 percent of the shares must be owned by a licensed optometrist. The remaining 49 percent may be owned by physicians and surgeons, podiatrists, psychologists, registered nurses, marriage and family therapists, clinical social workers, physician assistants, chiropractors, acupuncturists, naturopathic doctors or any other licensed person as specified in Business and Professions Code section 13401.5.
The number of licensed persons cannot exceed the number of optometrists, 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 Optometric Corporation may only be transferred to those who are licensed to practice optometry, to a shareholder of the corporation or to the professional Optometric corporation itself.
If a shareholder becomes ineligible to practice licensed optometry in California or is legally disqualified from rendering professional services to the Licensed optometry corporation, she must sell or transfer her shares to a qualified shareholder within 90 days of her ineligibility or disqualification.
Can A Optometric Corporation Be Opened As An LLC In California?
A Optometric Corporation can’t be opened as an LLC in California. The California Corporations Code does not certify LLCs (Limited Liability Companies) for the purpose of practicing optometry. For an optometrist to provide professional services in California, they must open a Professional Corporation.
Can A Professional Optometric Corporation Use a DBA Or Fictitious Name?
In California, a Professional Optometric Corporation can use a fictitious name so long as they file a fictitious business name statement within 40 days of starting the Professional Optometric Corporation. You must also make a fictitious name filing in every local county recorder’s office for which you are practicing. Also, Professional Optometric corporations may use fictitious business names, so long as such names are not false, misleading or deceptive.
How To Start an Optometric Professional Corporation
Here are the 10 steps you must take to form the California Professional Optometric 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 “Optometry.”
- Register the Corporation with the California State Board of Optometry 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 Optometric Corporation
- Create custom Professional Optometric 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 Optometric 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 Optometric Corporations and I can definitely help you with yours.
Looking to form your Optometric Corporation?
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