California physicians who practice medicine are permitted to form professional corporations here in California. The statutory authority is set forth in the Moscone-Knox Professional Corporation Act (the “Moscone-Knox Act”). See Cal. Corp. Code, §13400 et seq. Like all types of corporate entities, a Medical Corporation is formed by filing articles of incorporation with the California Secretary of State.

It is often better to form a Medical Corporation than to operate a practice as a sole proprietorship. The corporate form protects personal assets from being seized by business creditors and creating a California Professional Medical Corporation greatly facilitates adding licensed partners to a practice. The corporate form shields each of the partners from liability that may be alleged against the other(s). If you have questions about the requirements of forming a Professional Medical Corporation, or whether a Medical Corporation is the best entity type for your situation, reach out to the trusted corporate attorneys experienced in working with physicians.

Pursuant to California law, a Professional Medical Corporation has certain naming requirements that must be met when the corporation is formed. These name options include:

Medical:  If only the name or surname (last name) of the physician or podiatrist is used, followed by Medical Doctor, M.D., Podiatrist, Doctor of Podiatric Medicine, D.P.M., Medical Corporation, Medical Corp., Podiatry Corporation, Podiatry Corp., Professional Corporation, Prof. Corp., Corporation, Corp., Incorporated or Inc. Examples: “John Doe Medical Corporation” or “John Doe, M.D. Inc.” would not require a fictitious name permit as long as John Doe matches the legal name on the physician’s medical license.

2415. “(a) Any physician and surgeon or any doctor of podiatric medicine, as the case may be, who as a sole proprietor, or in a partnership, group, or professional corporation, desires to practice under any name that would otherwise be a violation of Section 2285 may practice under that name if the proprietor, partnership, group, or corporation obtains and maintains in current status a fictitious-name permit issued by the Division of Licensing, or, in the case of doctors of podiatric medicine, the California Board of Podiatric Medicine, under the provisions of this section.
2416. The use of any fictitious, false, or assumed name, or any name other than his or her own by a licensee either alone, in conjunction with a partnership or group, or as the name of a professional corporation, in any public communication, advertisement, sign, or announcement of his or her practice without a fictitious-name permit obtained pursuant to Section 2415 constitutes unprofessional conduct. This section shall not apply to the following:

(a) Licensees who are employed by a partnership, a group, or a professional corporation that holds a fictitious name permit.

(b) Licensees who contract with, are employed by, or are on the staff of, any clinic licensed by the State Department of Health Services under Chapter 1 (commencing with Section 1200) of Division 2 of the Health and Safety Code.

(c) An outpatient surgery setting granted a certificate of accreditation from an accreditation agency approved by the medical board.

(d) Any medical school approved by the division or a faculty practice plan connected with the medical school.

Consult with the experienced San Diego corporate attorneys to ensure that the name you want for your Professional Medical Corporation is compliant.

When forming a Professional Medical Corporation, retain an experienced San Diego corporate attorney to provide advice and assistance. There are special rules under the Moscone-Knox Act with respect to who may be shareholders — owners — in a Professional Medical Corporation. Likewise, there are limitations on who may be on the board of directors and who may serve as senior management. A Professional Medical Corporation is unique in this way.

The permitted shareholders, who may also serve as officers and directors, but who may not be greater in number than the physicians and must collectively hold 49% or less of the shares are as follows:

Medical corporations:

Licensed doctors of podiatric medicine;
Licensed psychologists;
Registered nurses;
Licensed optometrists;
Licensed marriage and family therapists;
Licensed clinical social workers;
Licensed physician assistants;
Licensed chiropractors;
Licensed acupuncturists;
Naturopathic doctors;
Licensed professional clinical counselors;
Licensed physical therapists;
Licensed pharmacists; and
Licensed midwives.

The corporation may have employees — such as a receptionist or a book-keeper — who are not licensed as long as those employees are not providing any sort of professional medical services.

Contact San Diego Corporate Law Today

For more information, contact attorney Michael J. Leonard, Esq., or Christina Gandy-Delgadillo, Esq., of San Diego Corporate Law. Michael and Christina can be reached at (858) 483-9200 or via email. These experienced corporate attorneys can ensure your Professional Medical Corporation is set up correctly and can assist with the annual maintenance of your California Professional Medical Corporation. San Diego Corporate Law provides a host of legal services for businesses including formation of other types of corporate entities.