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How to Start a San Diego Professional Pharmacy Corporation

If you are a licensed pharmacist here in San Diego, you can start your own independent pharmacy. To do so, you must form a California professional corporation — in this case, a California professional pharmacy corporation. The two keys are that you must hold a valid license issued by the California State Board of Pharmacy and that all other owners of your pharmacy corporation are also licensed pharmacists. If you are considering forming a California pharmacy corporation, you should retain an experienced San Diego corporate attorney to provide advice and counsel. Here is general information on how to start a San Diego pharmacy corporation.

Under California law, the only type of corporation that can provide pharmacy services is a California professional pharmacy corporation. See the Moscone-Knox Professional Corporation Act, Cal. Corp. Code, §13400 et seq. In general, the statutory regulation of pharmacies is provided by the California Business and Professions Code, §4100 et seq. With respect to pharmacy corporations, the specific provisions are §§4150-4156. Section 4150 provides that pharmacies shall be organized as California professional corporations under the Moscone-Knox Act. Under the provisions of section 4151, each shareholder and owner of a pharmacy corporation must be a licensed pharmacist. This is unique to pharmacists. Other California professional corporations can have a mix of owners where 51% or more must be licensed in the particular profession, but the remaining owners can have licensure from an “allied” professions. For example, a California Nursing Corporation can have owners who are licensed physicians, surgeons, psychologists, optometrists, marriage and family therapists, clinical social workers, etc. That is not the case with a California pharmacy corporation.

Note also that section 4151 requires that each director and officer of a pharmacy corporation be a licensed pharmacist. The provision allows that any “assistant secretary” or “assistant treasurer” does not have to have a pharmacist license. Every corporation is owned by its shareholders. The shareholders elect the people who sit on the board of directors at an annual meeting. Generally speaking, the board sets the policies for the corporation, approves major business decisions, and establishes the “guiding principles” for the corporation. The board then hires the officers of the corporation such as the President, Treasurer, Secretary, and other senior management. The officers conduct the day-to-day operations of the business under the direction and supervision of the board. The persons occupying various roles in a corporation often overlap. Thus, a shareholder is often a member of the board of directors and, sometimes, a board member is hired to be among the officers and senior management. Indeed, when a California professional corporation is owned by only one person, of necessity, that person will have a seat on the board — maybe the only seat — and will certainly be the CEO of the corporation.

In terms of formation, a California pharmacy corporation is formed by filing articles of incorporation with the California Secretary of State. There is a specific set of forms that are required for professional corporations. The name of your pharmacy corporation must comply with Cal. Prof. & Bus. Code, §4152 which provides that the name of a pharmacy corporation ” … shall contain the word “pharmacist,” “pharmacy,” or “pharmaceutical,” and wording or abbreviations denoting corporate existence.” After formation, it is important to have bylaws and other governing documents such as an Owners Agreement carefully drafted to cover the particular needs of your pharmacy corporation. There is no need to register your pharmacy corporation with the Board of Pharmacy.

Contact San Diego Corporate Law

For more information, call Michael Leonard, Esq., of San Diego Corporate Law. Mr. Leonard focuses his practice on business law, transactional, and corporate matters, and he proudly provides legal services to business owners in San Diego and the surrounding communities. Mr. Leonard can be reached at (858) 483-9200 or via email. Like us on Facebook.

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