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Forming a San Diego Professional Psychology Corporation

If you are a going out on your own as a psychologist, forming a California professional psychology corporation as the business entity for operating your practice is probably the best investment you can make in your new practice. Forming a California professional psychology corporation accomplishes many important goals for you personally and professionally, including:

  • Separating your personal assets and liabilities from any professional assets and liabilities
  • Protecting personal and family assets from be seized by creditors to pay for professional liabilities
  • Avoiding seizure of personal assets if there is a malpractice judgment
  • Making possible the future sale of your practice
  • Facilitating the expansion your practice
  • Facilitating the establishment of a business credit rating, providing even more distance between your business and your personal/family
  • Helping to obtain business financing
  • And more

Forming a California professional psychology corporation is easy with the assistance of an experienced San Diego corporate attorney.


Like all California corporations, a California professional psychology corporation is formed filing articles of incorporation with the California Secretary of State and drafting and filing the other required formation documents. The filings must be maintained annually with reports and fees. Annual corporate taxes must also be paid to the California Franchise Tax Board. The name of your corporation must indicate what type of professional, medical or healing arts service is being provided.


A California professional psychology corporation will be structured and run in the same manner as regular corporation. That is, the California professional psychology corporation will have shares owned by shareholders and will be run by a board of directors. The board will then hire the president of the corporation and other senior management to run the day-to-day affairs. Usually, there is a large overlap in these categories. So, shareholders are often on the board and then often hired as the President, Vice-President, etc. Like general stock corporations, a California professional psychology corporation can have one shareholder who functions in all of these capacities.

Eligibility for Ownership

California professional psychology corporations are governed by the California Moscone-Knox Professional Corporation Act of 1968 (the “Act”). See Cal. Corp. Code, §§ 13400 et seq. In general, only one type of healing arts service, such as psychology, can be provided via any given professional corporation. To be eligible to operate a California professional psychology corporation, the owner or owners must be licensed in that profession. Furthermore, only members of that particular profession or members of an allied profession can own or have an ownership interest. 51% of the corporate shares must be owned by that profession and up to 49% can be owned by members of other professions, as set forth in California Corporations Code § 13401.5. For psychology, the allied professions include licensed physicians, psychiatrists, social workers, marriage and family therapists and more. Your trusted San Diego corporate attorney can provide the full list from the statute and help determine what is the best ownership structure for your needs.

Contact San Diego Corporate Law

For more information, contact attorney Michael Leonard, Esq., of San Diego Corporate Law. Mr. Leonard can assist with forming your San Diego Psychologist Corporation, can draft articles of incorporation and bylaws, buy-sell agreements, employment contracts, and other related business contracts, and can help with corporate formalities and annual corporate maintenance. Mr. Leonard can be reached at (858) 483-9200 or via email. Like us on Facebook.

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