California psychologists who practice psychology 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 Psychology Corporation is formed by filing articles of incorporation with the California Secretary of State.

It is often better to form a Psychology 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 Psychology 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 Psychology Corporation, or whether a Psychology Corporation is the best entity type for your situation, reach out to the trusted corporate attorneys experienced in working with psychologists.

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

Psychology: 2998. “The name of a psychological corporation and any name or names under which it may render professional services shall contain one of the words specified in subdivision (c) of Section 2902, and wording or abbreviations denoting corporate existence.”

2902. (c) A person represents himself or herself to be a psychologist when the person holds himself or herself out to the public by any title or description of services incorporating the words “psychology,” “psychological,” “psychologist,” “psychology consultation,” “psychology consultant,” “psychometry,” “psychometrics” or “psychometrist,” “psychotherapy,” “psychotherapist,” “psychoanalysis,” or “psychoanalyst,” or when the person holds himself or herself out to be trained, experienced, or an expert in the field of psychology.

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

When forming a Professional Psychology 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 Psychology Corporation. Likewise, there are limitations on who may be on the board of directors and who may serve as senior management. A Professional Psychology 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 psychologists and must collectively hold 49% or less of the shares are as follows:

Psychological corporations:

Licensed physicians and surgeons;
Licensed doctors of podiatric medicine;
Registered nurses;
Licensed optometrists;
Licensed marriage and family therapists;
Licensed clinical social workers;
Licensed chiropractors;
Licensed acupuncturists;
Naturopathic doctors;
Licensed professional clinical counselors; 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 psychological 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 California Psychology Corporation is set up correctly and can assist with the annual maintenance of your California Professional Psychology Corporation. San Diego Corporate Law provides a host of legal services for businesses including formation of other types of corporate entities.