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Rules for Forming Your California Professional Midwifery Corporation
Licensed midwives are now permitted to form professional corporations here in California pursuant to the California professional corporation act. Midwives were added to the act in 2017. See the Moscone-Knox Professional Corporation Act (the “Moscone-Knox Act”); Cal. Corp. Code, §13400 et seq. In terms of business form, midwife services can only be provided through a California professional midwifery corporation. Midwives cannot provide their services through a regular corporation, through a limited liability company, or through any other type of corporate entity.
Licensed midwives are those who are authorized to:
- Attend cases of normal childbirth and assist in the delivery
- Provide prenatal, intrapartum, postpartum care for the mother and
- Provide immediate care for the newborn
Legally, “normal” pregnancy and childbirth is defined as the absence of any disease or medical condition that would affect or endanger the mother or the child, where labor is spontaneous or induced in an outpatient setting, and where labor commences between 37 and 42 weeks. As a profession, California midwives are governed by the Medical Board of California (the “Board”). See here. The Board grants licensure for midwives and midwife assistants pursuant to the Licensed Midwifery Practice Act of 1993, as amended. See Bus. & Prof. Code, 2505 et seq.
When operating your healing arts practice as a professional midwife corporation, there are many advantages to forming a corporate entity including:
- Protecting personal and family assets from being seized by business creditors
- Establishing a business credit rating
- The ability to sell or transfer your midwife professional corporation
- Tax advantages
- And more
A trusted and experienced San Diego corporate attorney can provide assistance and advice with respect to forming your professional midwifery corporation and can help with the annual maintenance. California professional corporations – including professional midwifery corporations — must be formed and maintained annually with the California Secretary of State. Failure to make the necessary annual filings and pay your corporate tax obligations can result in your California professional corporation losing its “good standing.” If your California professional corporation falls out of “good standing,” then the legal protections offered by the corporate form are lost.
In addition to filing the correct and necessary forms with the Secretary of State, your midwife professional corporation must comply with various restrictions on who may own and operate a midwifery professional corporation. For example, only licensed medical and healing arts professionals can be shareholders of your California professional midwifery corporation. More than 50% of those licensed professionals must be licensed midwives. Furthermore, the remaining shares of stock can only be owned by certain other licensed medical professionals. The permitted owners include at the time of this writing:
- Licensed physicians and surgeons
- Licensed Psychologists
- Licensed Clinical social workers
- Licensed professional clinical counselors
- Registered nurses
- Licensed Chiropractors
- Licensed Acupuncturists
- Licensed Physical therapists
- Licensed Naturopathic doctors
- Licensed Marriage and family therapists
- Licensed Physician assistants
Other statutory restrictions relate to who can serve on the board of directors and who can make the day-to-day decisions with respect to provision of midwifery services, how the corporation is named, who can share in professional fees earned, and more. Compliance with these restrictions must be incorporated in the bylaws of your corporation and/or into your policies and procedures. As can be seen, setting up your California midwifery professional corporation is complex and it is essential to consult an experienced San Diego corporate attorney.
Contact San Diego Corporate Law Today
For more information, contact attorney Michael Leonard, Esq., of San Diego Corporate Law. Mr. Leonard can be reached at (858) 483-9200 or via email. Mr. Leonard has been named a “Rising Star” for four years running by SuperLawyers.com. Mr. Leonard can ensure your professional midwife corporation is set up correctly. Mr. Leonard provides a full panoply of legal services for businesses including formation of corporate entities of all types. Like us on Facebook.
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