If you are a naturopathic doctor here in San Diego or elsewhere in California, you may want to form a California professional naturopathic doctor corporation through which to operate your practice. Naturopathic medicine is, as many know, a healing arts system focused on natural and non-invasive remedies relying on the body’s self-healing abilities. The focus is on naturally-occurring medicines such as herbs and on various therapies like acupuncture, exercise, and better nutrition. When engaged in naturopathic medicine, using a corporate entity has the main advantage of protecting your personal and family financial assets from being taken by creditors, including malpractice judgment creditors. There are other advantages such as ease of transfer/sale of your practice, the ability to establish a business credit rating, and higher rates of approval for business loans and credit. An experienced San Diego corporate attorney can provide advice and counsel on setting up your professional naturopathic doctor corporation.

The five basic steps are these:

  • File your article of incorporation with the California Secretary of State – this is the document needed to create the corporation which becomes a separate legal entity from the individuals that own the corporation; hiring a trusted San Diego corporate attorney can ensure that your custom-drafted articles comply with the required provisions of professional naturopathic doctor corporations
  • Obtain tax identification number — the most commonly obtained number is a federal tax identification number; this a unique identifying number for your corporation and is the number to provide instead of your personal SSN
  • Adopt the bylaws of the corporation- these should have provisions that are unique for a professional naturopathic doctor corporation and set out the specific shareholder ownership and other requirements for the corporation, contact an experienced San Diego corporate attorney to ensure your bylaws are compliant.
  • Hold the first shareholders meeting and elect the board of directors — a corporation is owned by shareholders, but the board runs the corporation on behalf of the shareholders
  • Hold the first directors meeting to hire the various senior staff that will operate the corporation on a day-to-day basis — the naturopathic doctors will usually have overlapping roles being a shareholder and a director and a member of senior management
  • Issue the stock of the corporation and file the necessary registration or exemption from registration of that stock

Under California law, there are some restrictions on who may be a shareholder of your new professional naturopathic doctor corporation. At least 51% of your shareholders must be licensed naturopathic doctors. The remaining shareholders must come from this list and must be currently licensed in their field of medicine:

  • Licensed physicians and surgeons
  • Licensed psychologists
  • Registered nurses
  • Licensed physician assistants
  • Licensed chiropractors
  • Licensed acupuncturists
  • Licensed physical therapists
  • Licensed doctors of podiatric medicine
  • Licensed marriage and family therapists
  • Licensed clinical social workers
  • Licensed optometrists
  • Licensed professional clinical counselors
  • Licensed midwives

These same restrictions apply to the members of the board of directors. These restrictions are set out in the Moscone-Knox Professional Corporation Act (the “Moscone-Knox Act” or the “Act”) passed in 1968. See Cal. Corp. Code, §13400 et seq. The Act gives healing arts professionals, like naturopathic doctors, the ability to form California professional corporations, as well as restrictions on ownership and management.

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 set up your California professional corporation and ensure that it remains in good standing year after year. Mr. Leonard can be reached at (858) 483-9200 or via email. Like us on Facebook.

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