San Diego Acupuncturists: Setting Up Your Acupuncture Professional Corporation

If you are an acupuncturist, San Diego Corporate Law may assist in determining if you should operate your acupuncture practice through a California Professional Acupuncture Corporation.

California professional corporations are provided for pursuant to the provisions of the Moscone-Knox Professional Corporation Act (the “Moscone-Knox Act” or the “Act”) originally passed in 1968. See Cal. Corp. Code, §13400 et seq. The Act was passed by the State Assembly to give healing arts professionals some of the advantages afforded by operating a business under a corporate form. In general, corporate entities provide their owners a “shield” that protects personal and family assets from being seized by creditors to pay for business debts, obligations, or liabilities. This is particularly important for medical professionals who may be subject to malpractice lawsuits. As such, corporate entities are “limited liability” entities. The corporate shield also works to protect personal assets for other types of judgments such a judgment that might result from an accident that causes injury to a patient, employee, or visitor to your office.

The Moscone-Knox Act provides a specific type of corporate entity for licensed professionals here in the Golden State. An experienced San Diego corporate attorney can provide advice and counsel about setting up your California professional corporation. Acupuncturists are among the professional allowed to create a California professional corporation. An acupuncturist cannot offer acupuncture services under any other type of corporate entity. Note that there are some strict rules about how you can set up your corporation. First and foremost, your professional corporation must be majority-owned by licensed acupuncturists. That is, at least 51% of the shares in your corporation must be owned by you and fellow acupuncturists. The remaining shares can only be owned by the following licensed medical professionals, as long as the other professionals do not outnumber the total acupuncturist shareholders:

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

Note that licensure is required. This means that if, for any reason, one of your owners loses or allows his/her license to lapse, then that person must be removed as an owner. For this reason, it is important that your acupuncture professional corporation have a Buy-Sell Agreement that establishes the conditions and procedures for automatically removing an owner who is no longer a licensed medical professional. A trusted San Diego corporate attorney can help custom-draft a Buy-Sell Agreement for this purpose and for other circumstances regarding share ownership and transfer.

Similar restrictions are placed on who may serve on the Board of Directors. In general, service on the board is limited to the same list of licensed medical professionals. As with any corporation, the board is elected by the shareholders and the board is responsible for running the company. The board then hires the CEO/President and the other officers/senior staff. Those persons operate the practice on a day-to-day basis. An acupuncture professional corporation can hire other types of employees as long as they are not engaged in providing the professional healing arts services.

In terms of naming your California acupuncture professional corporation, you must comply with various rules with respect to corporation names. The name must be unique (not already in use), must indicate that the entity is a corporation (not, for example, a limited liability company) and must identify your California professional corporation as a provider of acupuncture services. Thus your corporate name must contain the words “acupuncture” or “acupuncturist” and a corporate designator, which is a word or words that indicate corporate existence. Contact a San Diego attorney experienced in forming professional acupuncture corporations to ensure your entity is properly formed and will meet your needs.

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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