In the state of California, professionals are required to form a California Professional Corporation in order to practice their profession in corporate form. A California Professional Corporation is a type of corporate structure that offers liability protection for its owners while providing significant tax benefits and allowing them to maintain control over the operations of their business. In order to form a Professional Corporation in California, there are certain requirements that must be met, including choosing a permissible name.

This article discusses the selection of a business name by a California Professional Corporation, covering the requirements of the California Corporations Code, Moscone-Knox Professional Corporations Act, and California Business and Professions Code. It also discusses conducting a name search to avoid likelihood of confusion with other practices and trademark infringement.

Executive Summary: Putting the Conclusion First for Busy California Professionals

• A business entity, such as a professional corporation, is formed to provide limited liability protection and separate personal and corporate assets.
• California law requires certain licensed professionals to form a professional corporation, rather than a limited liability company or traditional corporation.
• The Knox Professional Corporation Act and Moscone-Knox Professional Corporation Act govern professional corporations in California.
• Business entities, including professional corporations, must comply with applicable rules and regulations, including name requirement and name restrictions.

Schedule a consultation to discuss your specific needs and the formation of a California Professional Corporation with the experienced corporate attorneys at San Diego Corporate Law today!

Introduction to California Professional Corporations

Choosing the right business structure is a fundamental decision for any professional offering professional services in California. The of the most advantageous options for most licensed professionals is the California Professional Corporation. California Professional Corporations are specifically designed for licensed professionals, offering unique liability protections and tax benefits that are not available through other structures like a sole proprietorship or a general partnership.

Under California Corporations Code Section 17701.04(e), the California Corporations Code does not permit a domestic or foreign limited liability company (California LLC or foreign LLC) to render professional services as defined in the Moscone-Knox Professional Corporation Act.

What Is a California Professional Corporation?

A California Professional Corporation is a special type of corporation created for the purpose of providing professional services that require a state license. Unlike a general stock California Corporation or California S-Corp, a California Professional Corporation can only be formed by individuals who hold a valid California license in a specific profession.

The primary purpose of a California Professional Corporation is to allow licensed professionals to gain the liability protection and tax advantages of a corporate structure. Without it, these professionals might operate as sole proprietors or partnerships, leaving their personal assets exposed to business debts, liabilities, obligations, and legal judgments while practicing in an inefficient tax structure.

California law strictly regulates which professions can only form a California Professional Corporation to practice in corporate form. The Moscone-Knox Professional Corporation Act outlines the specific rules, ensuring that the corporate entity does not shield professionals from malpractice claims related to their professional services.

Who Can Form a Professional Corporation?

Certain state-licensed professions are required to form a California Professional Corporation to practice in corporate form in California. The State of California wants to ensure that the individuals behind the corporation are qualified and accountable for the services they render.

Some of the most common professions that form California Professional Corporations include, without limitation:

Accounting (See California Business & Professions Code Sections 5150-5158)

Acupuncture (See California Business & Professions Code Sections 4975-4979)

Architecture (See California Business & Professions Code Sections 5610-5610.7)

Audiology (See California Business & Professions Code Sections 2536-2537.5)

Chiropractic (See California Business & Professions Code Sections 1050-1058)

Clinical Social Work (See California Business & Professions Code Sections 4998-4998.5)

Dentistry (See California Business & Professions Code Sections 1800-1808)

Dental Hygienists in Alternative Practice (See California Business & Professions Code Sections 1967-1967.4)

Law (See California Business & Professions Code Sections 6127.5, 6160-6172)

Marriage and Family Therapy (See California Business & Professions Code Sections 4987.5-4988.2)

Medicine (See California Business & Professions Code Sections 2400-2417)

Midwifery (See California Business & Professions Code Sections 2505-2523)

Naturopathic Doctors (See California Business & Professions Code Sections 3670-3675)

Nursing (See California Business & Professions Code Sections 2775-2781)

Occupational Therapy (See California Business & Professions Code Section 2572)

Optometry (See California Business & Professions Code Sections 3160-3167)

Osteopathy (See California Business & Professions Code Sections 2402-2417, 3600)

Pharmacy (See California Business & Professions Code Sections 4150-4156)

Physical Therapy (See California Business & Professions Code Sections 2690-2696)

Physician Assistants (See California Business & Professions Code Sections 3540-3545)

Podiatry (See California Business & Professions Code Sections 2402-2417)

Professional Clinical Counselor (See California Business & Professions Code Sections 4999.123-4999.129)

Psychology (See California Business & Professions Code Sections 2907-2907.5, 2995-2999)

Shorthand Court Reporters (See California Business & Professions Code Sections 8040-8047)

Speech-Language Pathology (See California Business & Professions Code Section 2537.5)

Veterinary (See California Business & Professions Code Sections 4910-4917)

It is critical to note that, with exception to California Corporations Code Section 13401.5 or as otherwise permitted by the California Business and Professions Code, all shareholders, directors, and officers of a California Professional Corporation must be licensed in that specific profession. California law makes some exceptions for non-licensed individuals to serve in roles like secretary or treasurer, but the core ownership and operational control must remain with the licensed professionals.

Key Benefits of Forming a California Professional Corporation

Why go through the effort of setting up a California Professional Corporation? Professionals choose this structure for several compelling legal and financial reasons that provide both protection and opportunities for growth.

Tax Advantages of California Professional Corporations

When properly operated, California Professional Corporations offer significant tax advantages and tax efficiency for licensed professionals. A California Professional Corporation can elect to be taxed as either an S-Corp or a C corporation (commonly referred to as a personal service corporation or professional service corporation). Each has distinct advantages.

• S Corporation Status: This is the most popular choice for California Professional Corporations, and for good reason. A California Professional S-Corp is a “pass-through” entity, meaning the net profits and losses are passed directly to the personal tax returns of shareholders, thus avoiding the “double taxation” that C corporations face. In addition, only the reasonable salary of employee shareholders is subject to payroll taxes as compared with all net profits of a sole proprietorship or general partnership being subject to 15.3% self-employment taxes.
• C Corporation Status: While subject to double taxation, a California Professional Corporation taxed as a C Corporation allows the business to retain earnings for growth and provides a wider range of deductible business expenses, such as health insurance premiums for owners. This can be beneficial for larger practices with significant revenue and reinvestment plans, but double taxation means that net income is taxed first at the corporate level and again when distributed to shareholders as dividends, which is generally a higher rate of taxation compared to California Professional Corporations taxed as S Corporations.

Consulting with a tax advisor is essential to determine which tax election is the most advantageous for a specific financial situation.

Limited Liability Protection of California Professional Corporations

Second only to tax benefits, a significant advantage of a California Professional Corporation is limited liability. In a sole proprietorship or general partnership, personal assets of shareholders (such as homes, cars, and bank accounts) are at risk from business incurs debts, liabilities, obligations, and legal judgments from lawsuits.

A California Professional Corporation creates a legal separation between the professional practice and its professional shareholders. This means that, in most cases, shareholders are not personally liable for professional debts, liabilities, obligations, or legal judgments. If the California Professional Corporation cannot pay a vendor bill, creditors can generally only pursue the assets for the California Professional Corporation, not the personal property and assets of the shareholders.

However, it is crucial to understand that this protection does not extend to professional malpractice or errors and omissions. Licensed persons are still personally liable for their professional negligence or errors in the professional services they personally provide, but a California Professional Corporation protects a professional shareholder from the professional malpractice or errors and omissions of practice partners and professional employees.

Credibility and Professional Image

Operating as a California Professional Corporation enhances professional credibility. The designation of corporate existence signals a more formal and established business structure to clients, partners, and financial institutions. This can make it easier to secure business loans, enter into contracts, and attract high-caliber talent.

Name Requirements for California Professional Corporations

California Professional Corporations must follow specific naming conventions set forth by the California Corporations Code generally, by the Moscone-Knox Professional Corporation Act of the California Corporations Code, and the California Business and Professions Code. The following is an overview of the requirements of each.

Name Requirements and Restrictions for California Professional Corporations Under the California Corporations Code and Generally

The Articles of Incorporation must include the name of the California Professional Corporation. California Corporations Code 202(a).

The Secretary of State shall not file articles setting forth a name in which “bank,” “trust,” “trustee,” or related words appear, unless the certificate of approval of the Commissioner of Financial Protection and Innovation is attached thereto. California Corporations Code Section 201(a).

The name of a California Professional Corporation shall not be a name that the Secretary of State determines is likely to mislead the public and shall be distinguishable in the records of the Secretary of State. California Corporations Code Section 201(b). This requires that names are not likely to mislead the public and be distinguishable from all other corporations in the records of the California Secretary of State that are in good standing, including names of foreign corporations qualified to transact interstate business in California.

The name of a California Professional Corporation shall not include the word “cooperative,” any abbreviation of it, or any related word. California Corporations Code 12311(b).

The name of a California Professional Corporation shall not include the words “Olympic” or “Olympiad,” or related phrases. 36 USC §220506.

The name of a California Professional Corporation shall not include the words “national,” “federal,” “United States,” “reserve,” or “deposit insurance,” and certain words and phrases referring to credit unions. 18 USC §709.

Name Requirements and Restrictions for California Professional Corporations Under the Moscone-Knox Professional Corporation Act of the California Corporations Code

Subject to California Corporations Code Section 201, a California Professional Corporation may adopt any name permitted by a law expressly applicable to the profession in which the corporation is engaged or by a rule or regulation of the governmental agency regulating that profession. California Corporations Code Section 13409(a). The Secretary of State may require proof by affidavit or otherwise establishing that the name of the California Professional Corporation complies with the requirements of this section and of the law governing the profession in which that professional corporation is engaged. Id. The statements of fact in those affidavits may be accepted by the Secretary of State as sufficient proof of the facts. Id.

Name Requirements and Restrictions for California Professional Corporations Under the California Business and Professions Code

When forming a California Professional Corporation, the most restrictive name requirements are often found in the California Business and Professions Code. The key requirements for the most frequently formed California Professional Corporations are listed below.

California Professional Accountancy Corporations

“No person or firm may practice public accountancy under any name which is false or misleading.” California Business and Professions Code Section 5060(a).

“No person or firm may practice public accountancy under any name other than the name under which the person or firm holds a valid permit to practice issued by the board.” California Business and Professions Code Section 5060(b).

“Notwithstanding subdivision (b), a sole proprietor may practice under a name other than the name set forth on his or her permit to practice, provided the name is registered by the board, is in good standing, and complies with the requirements of subdivision (a).” California Business and Professions Code Section 5060(c).

“The board may adopt regulations to implement, interpret, and make specific the provisions of this section including, but not limited to, regulations designating particular forms of names as being false or misleading.” California Business and Professions Code Section 5060(d).

California Professional Acupuncture Corporations

“The name of an acupuncture corporation and any name or names under which it may render professional services shall contain words “acupuncture” or “acupuncturist” and wording or abbreviations denoting corporate existence.” California Business and Professions Code Section 4978.

A California Professional Acupuncture Corporation may not use “P.C.” as its designation of corporate existence.

California Professional Architecture Corporations

“The name of a professional architectural corporation and any name or names under which it may be rendering professional services shall contain and be restricted to the name or the last name of one or more of the present, prospective, or former shareholders, or of persons who were associated with a predecessor person, partnership, or other organization and whose name or names appeared in the name of the predecessor organization, and shall include either (1) the words “architectural corporation” or (2) the word “architect” or “architects” and wording or abbreviations denoting corporate existence.” California Business and Professions Code Section 5610.3.

California Professional Audiology Corporations

“The name of an audiology corporation under which it may render professional services shall include one of the words specified in subdivision (b) of Section 2530.3 and the word “corporation” or wording or abbreviations denoting corporate existence.” California Business and Professions Code Section 2537.4(b).

“A person represents himself or herself to be an audiologist when he or she holds himself or herself out to the public by any title or description of services incorporating the terms “audiology,” “audiologist,” “audiological,” “hearing clinic,” “hearing clinician,” “hearing therapist,” or any similar titles.” California Business and Professions Code Section 2530.3(b).

California Professional Chiropractic Corporations

“Notwithstanding any other provision of law, the name of a chiropractic corporation and any name or names under which it may be rendering professional services, shall contain the name or the last name of one or more of the present, prospective, or former shareholders, and shall include the word “chiropractic” and the word “corporation” or wording or abbreviations denoting corporate existence.” California Business and Professions Code Section 1054.

California Professional Licensed Clinical Social Worker Corporations

“Notwithstanding Section 4996, the name of a licensed clinical social worker corporation and any name or names under which it may be rendering professional services shall contain the words “licensed clinical social worker” and wording or abbreviations denoting corporate existence. A licensed clinical social worker corporation that conducts business under a fictitious business name shall not use any name which is false, misleading, or deceptive, and shall inform the patient, prior to the commencement of treatment, that the business is conducted by a licensed clinical social worker corporation.” California Business and Professions Code Section 4998.2.

California Professional Dental Corporations

”Notwithstanding subdivision (i) of Section 1680 and subdivision (g) of Section 1701, the name of a dental corporation and any name or names under which it may be rendering professional services shall contain and be restricted to the name or the last name of one or more of the present, prospective, or former shareholders and shall include the words “dental corporation” or wording or abbreviations denoting corporate existence, unless otherwise authorized by a valid permit issued pursuant to Section 1701.5.” California Business and Professions Code Section 1804.

California Professional Dental Hygienist in Alternative Practice Corporations

The California Business and Professions Code is silent with respect to naming requirements and restrictions for California Professional Dental Hygienist in Alternative Practice Corporations.

California Professional Law Corporations

“That the name of the law corporation and any name or names under which it renders legal services shall be in compliance with the rules and regulations.” California Business and Professions Code Section 6171(c).

“That the law corporation shall obtain from the State Bar, and maintain current, a fictitious name permit when required by the rules and regulations; that the permit may be obtained, maintained, suspended, and revoked pursuant to procedures set forth in the rules and regulations; and that the law corporation shall pay an application and renewal fee for the permit in such amounts as may be determined by the State Bar.” California Business and Professions Code Section 6171(d).

“The name under which the law corporation intends to practice law must include a designation of corporate existence such as “A Professional Corporation”, “A Professional Law Corporation”, “Professional Corporation”, “Professional Law Corporation”, “Law Corporation”, “APC”, A.P.C.”, “PC”, “P.C.” “Prof. Corp.”, “A Professional Legal Corporation”, “Professional Legal Corporation”, “A Legal Corporation”,  “Corporation,” “A California Professional Corporation” “Incorporated”, or “Inc.”” California Rules of Professional Conduct 3.152(B).

California Professional Marriage and Family Therapy Corporations

“The name of a marriage and family therapy corporation shall contain one or more of the words “marriage,” “family,” or “child” together with one or more of the words “counseling,” “counselor,” “therapy,” or “therapist,” and wording or abbreviations denoting corporate existence. A marriage and family therapy corporation that conducts business under a fictitious business name shall not use any name that is false, misleading or deceptive, and shall inform the patient, prior to the commencement of treatment, that the business is conducted by a marriage and family therapy corporation.” California Business and Professions Code Section 4987.7.

California Professional Medical Corporations

“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.” California Business and Professions Code Section 2285.

“(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. (b) The division or the board shall issue a fictitious-name permit authorizing the holder thereof to use the name specified in the permit in connection with his, her, or its practice if the division or the board finds to its satisfaction that: (1) The applicant or applicants or shareholders of the professional corporation hold valid and current licenses as physicians and surgeons or doctors of podiatric medicine, as the case may be. (2) The professional practice of the applicant or applicants is wholly owned and entirely controlled by the applicant or applicants. (3) The name under which the applicant or applicants propose to practice is not deceptive, misleading, or confusing. (c) Each permit shall be accompanied by a notice that shall be displayed in a location readily visible to patients and staff. The notice shall be displayed at each place of business identified in the permit. (d) This section shall not apply to licensees who contract with, are employed by, or are on the staff of, any clinic licensed by the State Department of Health Care Services under Chapter 1 (commencing with Section 1200) of Division 2 of the Health and Safety Code or any medical school approved by the division or a faculty practice plan connected with that medical school. (e) Fictitious-name permits issued under this section shall be subject to Article 19 (commencing with Section 2421) pertaining to renewal of licenses. (f) The division or the board may revoke or suspend any permit issued if it finds that the holder or holders of the permit are not in compliance with the provisions of this section or any regulations adopted pursuant to this section. A proceeding to revoke or suspend a fictitious-name permit shall be conducted in accordance with Section 2230. (g) A fictitious-name permit issued to any licensee in a sole practice is automatically revoked in the event the licensee’s certificate to practice medicine or podiatric medicine is revoked. (h) The division or the board may delegate to the executive director, or to another official of the board, its authority to review and approve applications for fictitious-name permits and to issue those permits. (i) The California Board of Podiatric Medicine shall administer and enforce this section as to doctors of podiatric medicine and shall adopt and administer regulations specifying appropriate podiatric medical name designations.” California Business and Professions Code Section 2415.

California Professional Midwifery Corporations

The California Business and Professions Code is silent with respect to naming requirements and restrictions for California Professional Midwifery Corporations.

California Professional Naturopathic Doctor Corporations

“The name of a naturopathic corporation and any name or names under which it may render professional services, shall contain the words “naturopathic” or “naturopathic doctor” and, as appropriate, wording or abbreviations denoting its status as a corporation.” California Business and Professions Code Section 3674.

California Professional Nursing Corporations

“The name of a nursing corporation and any name or names under which it may render professional services shall contain the words “nursing” or “registered nursing,” and wording or abbreviations denoting corporate existence.” California Business and Professions Code Section 2778.

California Professional Occupational Therapy Corporations

The California Business and Professions Code is silent with respect to naming requirements and restrictions for California Professional Occupational Therapy Corporations.

California Professional Optometric Corporations

“Except as provided in Section 3078, the name of an optometric corporation and any name or names under which it may be rendering professional services shall contain and be restricted to the name or the last name of one or more of the present, prospective, or former shareholders and shall include the words optometric corporation or wording or abbreviations denoting corporate existence, provided that the articles of incorporation shall be amended to delete the name of a former shareholder from the name of the corporation within two years from the date the former shareholder dies or otherwise ceases to be a shareholder.” California Business and Professions Code Section 3163.

California Professional Osteopathy Corporations

The California Business and Professions Code is silent with respect to naming requirements and restrictions for California Professional Osteopathy Corporations; however, the California Code of Regulations provides as follows:

“Any Fictitious name shall contain the designation “medical group”, “medical clinic”, “medical corporation”, “medical associates”, “medical center”, or “medical office”. Such designation shall be contiguous in the name style and not separated by intervening words. This requirement also applies to those applicants who are sole practitioners.” 16 CCR Section 1676(a).

A group or clinic containing both a corporate and non-corporate entity or a partnership of corporations shall not use wording or abbreviations denoting corporate existence. When a professional corporation is an applicant, it shall use in its fictitious name style one of the word(s) or abbreviations denoting corporate existence as required by these regulations.” 16 CCR Section 1676(b).

The Board shall not issue a fictitious name permit for a name style which is false or misleading or which is so similar to a name previously authorized in the same geographical area as to be deceptive, misleading, or subject an individual consumer to confusion with a previously permitted fictitious name.” 16 CCR Section 1676(c).

The use of word(s) or abbreviation(s) following a licensed person’s name denoting affiliation with a professional medical society or association shall not create a fictitious name; however, the use of any word(s) or abbreviation(s) which denotes a particular specialty in medical practice which is advertised or disseminated in public.” 16 CCR Section 1676(d).

California Professional Physical Therapy Corporations

“The name of a physical therapy corporation and any name or names under which it may render professional services shall contain the words “physical therapy” or “physical therapist”, and wording or abbreviations denoting corporate existence.” California Business and Professions Code Section 2693.

California Professional Physician Assistant Corporations

“The name of a physician assistant corporation and any name or names under which it may render professional services shall contain the words “physician assistant,” and wording or abbreviations denoting corporate existence.” California Business and Professions Code Section 3543.

California Professional Podiatric Medical Corporations

“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.” California Business and Professions Code Section 2285.

“(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. (b) The division or the board shall issue a fictitious-name permit authorizing the holder thereof to use the name specified in the permit in connection with his, her, or its practice if the division or the board finds to its satisfaction that: (1) The applicant or applicants or shareholders of the professional corporation hold valid and current licenses as physicians and surgeons or doctors of podiatric medicine, as the case may be. (2) The professional practice of the applicant or applicants is wholly owned and entirely controlled by the applicant or applicants. (3) The name under which the applicant or applicants propose to practice is not deceptive, misleading, or confusing. (c) Each permit shall be accompanied by a notice that shall be displayed in a location readily visible to patients and staff. The notice shall be displayed at each place of business identified in the permit. (d) This section shall not apply to licensees who contract with, are employed by, or are on the staff of, any clinic licensed by the State Department of Health Care Services under Chapter 1 (commencing with Section 1200) of Division 2 of the Health and Safety Code or any medical school approved by the division or a faculty practice plan connected with that medical school. (e) Fictitious-name permits issued under this section shall be subject to Article 19 (commencing with Section 2421) pertaining to renewal of licenses. (f) The division or the board may revoke or suspend any permit issued if it finds that the holder or holders of the permit are not in compliance with the provisions of this section or any regulations adopted pursuant to this section. A proceeding to revoke or suspend a fictitious-name permit shall be conducted in accordance with Section 2230. (g) A fictitious-name permit issued to any licensee in a sole practice is automatically revoked in the event the licensee’s certificate to practice medicine or podiatric medicine is revoked. (h) The division or the board may delegate to the executive director, or to another official of the board, its authority to review and approve applications for fictitious-name permits and to issue those permits. (i) The California Board of Podiatric Medicine shall administer and enforce this section as to doctors of podiatric medicine and shall adopt and administer regulations specifying appropriate podiatric medical name designations.” California Business and Professions Code Section 2415.

California Licensed Professional Clinical Counselor Corporations

“The name of a professional clinical counselor corporation and any name or names under which it may be rendering professional services shall contain the words “licensed professional clinical counselor” or “professional clinical counselor” and wording or abbreviations denoting a corporate existence. A professional clinical counselor corporation that conducts business under a fictitious business name shall not use any name that is false, misleading, or deceptive, and shall inform each patient, prior to commencement of treatment, that the business is conducted by a professional clinical counselor corporation.” California Business and Professions Code Section 4999.125.

California Professional Psychological Corporation

“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.” California Business and Professions Code Section 2998.

“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.” California Business and Professions Code Section 2902(c).

California Professional Speech-Language Pathology Corporation

“The name of a speech-language pathology corporation under which it may render professional services shall include one of the words specified in subdivision (a) of Section 2530.3 and the word “corporation” or wording or abbreviations denoting corporate existence.” California Business and Professions Code Section 2537.4(a).

“A person represents himself or herself to be a speech-language pathologist when he or she holds himself or herself out to the public by any title or description of services incorporating the words “speech pathologist,” “speech pathology,” “speech therapy,” “speech correction,” “speech correctionist,” “speech therapist,” “speech clinic,” “speech clinician,” “language pathologist,” “language pathology,” “logopedics,” “logopedist,” “communicology,” “communicologist,” “aphasiologist,” “voice therapy,” “voice therapist,” “voice pathology,” or “voice pathologist,” “language therapist,” or “phoniatrist,” or any similar titles; or when he or she purports to treat stuttering, stammering, or other disorders of speech.” California Business and Professions Code Section 2530.3(a).

California Professional Veterinary Corporation

“Notwithstanding any other provision of law, the name of a veterinary corporation and any name or names under which it renders professional services shall include the words “veterinary corporation” or wording or abbreviations denoting corporate existence.” California Business and Professions Code Section 4911.

Checking Name Availability for a Professional Corporation in California

Once a proposed name (or a few proposed names) are identified, a name should be checked for availability. Not only must the name be distinguishable in the records of the California Secretary of State, but the name also needs to not cause a likelihood of confusion with any name used throughout the United States to avoid trademark infringement claims. Follow these steps to conduct a thorough search.

Step 1: Use the California Secretary of State’s Online Business Search Tool

The first and most important step is to search the California Secretary of State’s official business database. This free, online tool allows users to search if a desired name is already in use or too similar to an existing one.

Here is how to use it effectively:

1. Navigate to the Business Search Tool: Visit the official California Secretary of State’s website and find the “Business Search” feature.
2. Select the Search Type: You can search by “Corporation Name,” “LLC/LP Name,” or “Entity Number.” Choose the appropriate option for your search. It is wise to search across all entity types to ensure a name is truly unique.
3. Enter the Proposed Name: Type the desired name into the search field to search for exact matches.
4. Be Creative with Your Searches:
   • Search for variations: Try searching for key parts of the name.
   • Check for plural and singular forms: Search for both singular and plural forms of words to find differences the California Secretary of State would deem indistinguishable.
   • Look for phonetic similarities and equivalents: Consider names that sound alike but are spelled differently, interchange “&” and “and” in names, etc. The Secretary of State may reject a name if it sounds too similar to an existing one even if spelled differently.

If a search returns “No records found,” that is a good sign! However, if it shows a list of similar names, review them carefully to determine if the desired name is distinguishable enough.

The experienced corporate attorneys at San Diego Corporate Law conduct Secretary of State searches of all California Professional Corporation names before filing Articles of Incorporation when engaged to form a California Professional Corporation for their clients.

Step 2: Perform a General Web and Trademark Search

Even if a name is available with the Secretary of State, it might be in use elsewhere. A broader search can help avoid potential trademark conflicts down the road.

• Search Engines: Use Google, Bing, or another search engine to look for your proposed name. See if other businesses, especially those in your geographic area or industry, are using the same name or a similar name that might cause a likelihood of confusion.
• Trademark Database: Conduct a search on the U.S. Patent and Trademark Office’s (USPTO) Trademark Electronic Search System (TESS). This will indicate if a name, or a similar name, is already federally trademarked.

While this step is not required for state-level registration, it is a smart business practice that can save from a costly legal dispute in the future.

Step 3: Find an Available Internet Domain Name

In the digital age, having a strong online presence is crucial for any professional practice. This includes having a website with a memorable and relevant domain name.

When considering a potential name for a California Professional Corporation, it is important to also check if a corresponding domain name is available. This can be done through various domain registrars such as GoDaddy or Bluehost.

If a desired domain name is already taken, consider purchasing an alternative variation; provided, however, that an unavailable domain name might indicate another company is already using the name.

Found an Available Name? How to Set Up a Professional Corporation in California!

Congratulations! Finding an available and compliant name is a major milestone. The next step is forming a California Professional Corporation. The process requires careful attention to detail to ensure compliance with state laws and the regulations of your specific professional licensing board. The easiest way to form a California Professional Corporation is to schedule an initial consultation with an experienced corporate attorney.

The following is an outline of some of the legal requirements for forming a California Professional Corporation:

File Articles of Incorporation

The first step is to file Moscone-Knox Professional Corporations Act compliant Articles of Incorporation with the California Secretary of State. These Articles of Incorporation must include specific language stating that the California Professional Corporation is a California Professional Corporation under the Moscone-Knox Professional Corporation Act and specify the exact professional service the California Professional Corporation will provide.

Draft Corporate Bylaws

Bylaws are the internal rulebook for a California Professional Corporation. For a California Professional Corporation, the bylaws must include Moscone-Knox Professional Corporations Act, professional-specific provisions that comply with California law, such as restrictions on who can be a shareholder. These rules ensure that only certain licensed professionals can own shares in the California Professional Corporation.

Issue Stock and Appoint Directors

Once the California Professional Corporation is formed, it must issue shares of stock to the founding licensed professionals. It is essential to properly document this issuance in compliance with both corporate and securities laws, as well are making necessary filings with the appropriate California and federal securities regulators. The California Professional Corporation must also appoint the initial board of directors, who must also be licensed professionals.

Obtain an EIN and File for Tax Election

After formation, the California Professional Corporation needs to obtain an Employer Identification Number (EIN) from the Internal Revenue Service. This is the federal tax identification number of the California Professional Corporation. Following this, the forms necessary to elect the preferred tax status as an S corporation should be prepared and filed if electing S-Corp status.

Is a Professional Corporation Right for You?

Forming a California Professional Corporation offers a powerful way for licensed professionals to protect their personal assets and optimize their tax situation. By establishing a separate legal entity, these professionals can build a more credible and durable practice while mitigating many of the risks associated with being a sole proprietor.

While the process is more complex than other business structures, the long-term benefits of liability protection and tax flexibility often make it a worthwhile investment.

If you are a licensed professional in California, exploring the possibility of forming a California Professional Corporation could be a crucial step toward securing your financial future. Contact the experienced corporate attorneys at San Diego Corporate Law to schedule a consultation to discuss your specific needs and navigate the formation process successfully.