Who Can Own A Professional Medical Corporation In California?

Being in the medical field entitles a person to be more than just a doctor. However, who can own a professional medical corporation in California?

What are the protocols and legal regulations? Californian restrictions are slightly different from other states.

This is why we have to understand certain terms and conditions before understanding who can establish a professional medical corporation. Shall we take a look?

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Professional Medical Corporation in California: Who Can Own One?

Once you find out who gets nominated for this field, the legal protocols will be easier to follow.


The shareholders must be licensed in the same State. It means an individual shareholder cannot even vote a proxy if his/her license is from a different State.

Therefore, the shareholder must have a medical license issued in California State to acquire the shares of the medical corporation.

Licensed Physician

Since it is a medical corporation, there must be a licensed physician or a surgeon among the shareholders. The person has to obtain 51% shares based on the Moscone-Knox Professional Corporation Act.

California law strictly prohibits a non-physician from owning the majority shares of a professional medical corporation. The law also limits how many non-physicians can own the shares.

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Limited Ownership

As mentioned above, only a licensed physician who is also a member of the medical corporation can have the upper hand in shares. However, others are eligible for the minority factor. It means they can be part of the 49% shares in the corporation.

Other licensed services in the medical field can also be a part of the corporation. Such as:

  • Optometrists
  • Registered Nurses (RN)
  • Physical Therapists
  • Chiropractors
  • Clinical Social Workers
  • Psychologists
  • Physician Assistants
  • Acupuncturists

One must ensure that no non-doctor individual can outnumber the medically licensed professionals.

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What Is Professional Medical Corporation?

You now know who can own this corporation. But the idea of establishing in this field indicates learning further regarding the term.

California does not offer traditional medical practices as business entities. It is limited to Professional Corporations or PCs.

The State utilizes Moscone-Knox Professional Corporation Act to govern the professional medical corporation, which delivers California Corporation Code. Besides, it abides by the legal regulations of the Medical Board of California.

A professional medical corporation is formed when the physicians and doctors form to offer certified services. You can contact a California medical attorney to learn more.

Advantages of A Professional Medical Corporation

Four crucial aspects will gain a positive outlook upon forming a professional medicalk corporation.

You’ll Be Legally Protected

Do you know what gets mostly affected when there is a lawsuit or medical malpractice? It is the personal assets that are often affiliated with business assets.

Nonetheless, the professional medical corporation allows a separation between the two asset types. As a result, the licensed individual will have limited personal liability instead of zero assets.

Remember that this rule does not protect a doctor when there is a malpractice claim, also known as professional liability.

As long as the corporation is established and operated under lawful acts, it can protect personal assets from various claims by a colleague or employee.

Some claims may include lawsuits, commercial claims, malpractice by a coworker, etc.

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Attain Business Credit

Here the business credit means the value you receive when you decide to sell the business. It is applied when you form a new partnership as well.
The business credit is greatly beneficial that may not even require a personal guarantee.

Avoid Double Taxation

Keep in mind that the reduction of double taxation takes place after electing the professional medical corporation as an S-Corp. Consequently, the profits gained by the corporation will pass through to the shareholders.

Losses faced will also take similar action. This avoids double taxation the legal way. Becoming an S-Corp also decreases self-employment taxes applied to the shareholders at distributions.

Outlying Benefits

Two important fringe benefits can be obtained when in a professional medical corporation. You can attain stability in the long-term due to their availability:
1. Medical care &
2. Retirement plans

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Final Words

So who can own a professional medical corporation in California? Despite the unique strictness in the State, you can own 51% of the shares as long as you are a licensed physician. You can still be a shareholder if one of your profession’s services is medically licensed.

Keep in mind that there are severe consequences of improper medical corporation formation. Moreover, you can even face monetary penalties.

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