If you’re a physician assistant (PA), you SHOULD form a Professional Corporation taxed as an S-Corporation.
California law prohibits physician assistants (PA) from forming LLCs or traditional general corporations from their physician assistant practices. Instead, they 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.
What is a Physician Assistants Corporation?
A Professional Physician Assistants Corporation is a professional corporation which is registered with the California Secretary of State and the Medical Board of California.
In California, all professional corporations must be registered with the corresponding governmental agency that is tasked to manage their profession. Professional Physician Assistants Corporation must hold a certificate of registration from the Medical Board of California.
3 Steps to Starting a Professional Physician Assistants Corporation
The 3 steps to starting a Professional Physician Assistants 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 Physician Assistant Professional Corporation
Incorporating a Professional Physician Assistants 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 Physician Assistant Professional Corporation
The Professional Physician Assistants Corporation’s name must contain the words “physician assistant”. 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 physician assistant medicine, based on underlying Corporate Code concerning Professional Corporations.
Who Can Be a Shareholder Of The Professional Physician Assistants Corporation?
At least 51 percent of the shares must be owned by the physician assistant. The remaining 49 percent may be owned by Licensed physicians and surgeons, Registered nurses, Licensed acupuncturists, Naturopathic doctors, and Licensed midwives. The number of licensed persons cannot exceed the number of physician assistants, 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 Physician Assistants Corporation may only be transferred to those who are licensed to practice registered physician assistant, to a shareholder of the corporation or to the Professional Physician Assistants Corporation itself.
If a shareholder becomes ineligible to practice physician assistant services in California or is legally disqualified from rendering professional services to the Professional Physician Assistants Corporation, she must sell or transfer her shares to a qualified shareholder within 90 days of her ineligibility or disqualification.
Can a Physician Assistants Corporation Be Opened As An LLC In California?
A Physician Assistants Corporation can’t be opened as an LLC in California. The California Corporations Code does not certify LLCs to practice podiatry. For a physician assistant to provide professional services in California, they must open a Professional Corporation.
Can a Professional Physician Assistants Corporation Use a DBA Or Fictitious Name?
In California, a Professional Physician Assistants Corporation can use a fictitious name or DBA for the Corporation so long as it is not deceptive, misleading, or confusing. The fictitious name must include the designation “physician assistant”.
How To Start a Physician Assistants Professional Corporation
Here are the 9 steps you must take to form the Professional Podiatry 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 “Physician Assistant”.
- Conduct a corporate meeting where you will issue shares and elect officials and directors for the Professional Physician Assistants Corporation
- Create custom Professional Physician Assistants 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 Physician Assistants 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 Physician Assistants Corporation and I can definitely help you with yours.
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