Steps for Forming Your Professional Optometry Corporation
California professional corporations are specifically provided for by California statute. The State Assembly provided a mechanism for using the corporate form for professionals including those performing healing arts. The general purpose of the statute — the Moscone-Knox Professional Corporation Act — was to provide professionals an alternative to forming partnerships and to provide a corporate form whereby professionals could take advantage of the shield provided by corporations to protect personal and family assets. Optometrists cannot practice optometry as a limited partnership or as a limited liability corporation in California. An experienced San Diego corporate attorney can help you form your California professional optometry corporation and can help with the other necessary tasks such as drafting custom corporate bylaws and drafting an Owners Agreement or Buy-Sell Agreement. Here are five simple steps for forming your professional optometry corporation.
Step One: Chose Owners and Directors
The first step is to decide who will own the corporation and who will be on the board of directors. Like other corporations, California professional optometry corporations are owned by shareholders and the corporation is run by the board of directors. There are restrictions on who may own an optometry corporation. The owners are limited to those holding licensure in the following professions:
- Licensed optometrists
- Licensed physicians and surgeons (including pediatricians)
- Licensed doctors of podiatric medicine
- Licensed psychologists
- Registered nurses
- Licensed chiropractors
- Licensed acupuncturists
- Naturopathic doctors
Importantly, however, at least 51% of the shares must be owned by licensed optometrists and the number of licensed optometrists must be greater than or equal to the number of non-optometrist licensed shareholders. See Cal. Corp. Code, §§ 13401, 13401.5. There are similar limitations on who may be elected to the board of directors of your new corporation.
Step Two: Choose a Name for Your Corporation
According to statute, the name of your optometric corporation must contain three elements:
- The name or the last name at least one of the present, prospective, or former shareholders
- The words “optometric” or “optometry” or other words denoting the profession of optometry
- Wording or abbreviations denoting corporate existence
An example would be: “Dr. Maria Smith, O.D., Optometric Corporation.” See Cal. Bus. & Prof. Code, § 3163.
Step Three: File Articles of Incorporation.
Using your chosen name, the next step is to file articles of incorporation with the California Secretary of State. This is done in the same manner as for regular corporations – articles of incorporation are drafted and submitted, and a filing fee is paid. The filing fee for articles of incorporation is currently $100.00.
Step Four: Elect the Board and Adopt Corporate Bylaws
The next step is to have the shareholders vote and elect the board of directions. Next, the board must adopt the corporation’s bylaws. Legally, corporations are governed by their bylaws. Among other things, the bylaws specify how many directors will be elected, which corporate officers will be needed, and more. It is important to have custom-drafted and well-crafted bylaws. These should be unique to your California professional optometry corporation.
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.