3 Steps to Starting Your Speech Language Pathology Corporation (2023)

Speech Language Pathologist Corporation

If you’re a speech language pathologist in California, you SHOULD form a Professional Corporation taxed as an S-Corporation.

California law prohibits speech language pathologist from forming LLCs or a traditional corporations for their speech language pathology practice. Instead, speech language pathologists who are trying to start their own speech therapy practice 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 Speech-Language Pathology Board of California.

As a Business Lawyer for Professionals, I’ve assisted hundreds of speech-language pathology professionals just like you start their Professional Corporation and I can definitely help you start yours.

If you’re a speech language pathologist looking to start your Professional Corporation, email me at sam@mollaeilaw.com or talk to me directly at 818-925-0002

 

What is a Speech Language Pathology Professional Corporation

A professional speech language pathology Corporation is a professional corporation which is registered and hold a certificate with the California Secretary of State and the Speech-Language Pathology and Audiology Board.

3 Steps to Starting a Professional Speech Language Pathology Corporation

The 3 steps to starting a Professional Speech Language Pathology Corporation are:

  1. File the Articles of Incorporation of a Professional Corporation with the Secretary of State to form the Professional Corporation
  2. 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.
  3. Do all the steps above yourself or hire a Business Lawyer to do it for you correctly and efficiently the first time.

If you’re a speech language pathologist looking to form your Professional Corporation, email me email me at sam@mollaeilaw.com or talk to me directly at 818-925-0002

 

Benefits Of Starting A Professional Speech Language Pathology Corporation

Starting your own speech language pathology 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 Speech Language Pathology Corporation

The speech therapy business name must include one of the following; “speech pathologist,” “speech pathology,” “speech therapy,” “speech correction,” “speech correctionist,” “speech therapist,” “speech clinic,” “speech clinician,” “language pathologist,” “language pathology,” “logopedics,” “logopedist,” “communicology,” “communicologist,” “aphasiologist,” “voice therapy,” “voice therapist,” “voice pathology,” or “voice pathologist,” “language therapist,” or “phoniatrist,” or any similar titles.

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 speech language pathology, based on underlying Corporate Code concerning Professional Corporations.

 

Who Can Be A Shareholder Of The Professional Speech Language Pathology Corporation?

Each director, shareholder, and officer of the professional Speech Language Pathology corporation MUST be licensed to practice speech language pathology in California.

Shares of stock in the speech language pathology corporation can only be issued to people who are licensed to practice speech language pathology. However, licensed audiologists may also hold shares, or be officers, directors, or professional employees as long as shares owned by licensed audiologists do not total more than 49% of all shares in the corporation.

Any shares shares issued to others who do not practice speech language pathology or audiology are void.

Also, shares in the speech language pathology corporation may only be transferred to those who are licensed to practice speech language pathology, to a shareholder of the corporation or to the professional speech language pathology corporation itself.

If a shareholder becomes ineligible to practice speech language pathology in California or is legally disqualified from rendering professional services to the speech language pathology corporation, she must sell or transfer her shares to a qualified shareholder within 90 days of her ineligibility or disqualification.

 

Can A Speech Language Pathology Corporation Be Opened As An LLC In California?

A speech language pathology 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 speech language pathology.

For a speech language pathologist to provide professional services in California, they must open a Professional Corporation.

Can A Speech Language Pathology Corporation Use a DBA Or Fictitious Name?

In California, a speech language pathology corporation can use a fictitious name so long as they file a fictitious business name statement within 40 days of starting the speech language pathology 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 Speech Language Pathology Corporation

Here are the 9 steps you must take to start a Professional Speech Language Pathology Corporation:
  1. 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 “Speech Language Pathology”.
  2. Conduct a corporate meeting where you will issue shares and elect officials and directors for the Professional Speech-Language Pathology Corporation
  3. Create custom Speech-Language Pathology Corporation bylaws
  4. Apply for an EIN
  5. File the Statement of Information with the Secretary of State
  6. File Form 2553 for S-Corporation Tax Election for the Professional Speech-Language Pathology Corporation
  7. Pay California Corporate Taxes and Fees to the California Franchise Tax
  8. Register with the EDD if you will be hiring employees
  9. Apply for local business registration and licenses
If you’re interested in forming your California Professional Corporation, email me at email me at sam@mollaeilaw.com or talk to me directly at 818-925-0002

 

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 Speech-Language Pathology Corporations and I can definitely help you with yours.

Looking to form your Professional Corporation? Email me email me at sam@mollaeilaw.com or talk to me directly at 818-925-0002

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