Who Can Be a Shareholder in a CA Professional Corporation?

As a doctor, when you start a corporation in California, you’re likely filled with both excitement and a certain amount of apprehension. On one hand, the excitement of starting a new business stems from completing your education and working hard over several years. On the other hand, you might be intimidated by not knowing where to start, what to file, or what to expect.

In this article, we’ll answer the first question most doctors ask when starting their corporation in California: Who can be a shareholder in your California professional corporation?

Professional vs General Corporation

In California, a professional corporation differs from a general stock corporation. A professional corporation is a specific type of corporation for professionals like doctors, lawyers, accountants, etc; and only performs services in one single profession. If you are a healthcare provider ready to start a practice, you must form your corporation as a professional corporation.

The Moscone Knox Professional Corporation Act

Professional corporations in California are governed by the Moscone-Knox Professional Corporation Act. According to the Moscone-Knox Professional Corporation Act “professional services” are any type of services that may be lawfully rendered only pursuant to a license, certification, or registration authorized by the Business and Professions Code, the Public Accountancy Act, or the Osteopathic Act.

Shareholders: The Bottom Line

So, who can be a shareholder in your new professional corporation? The following is a list of licensed professionals who may be shareholders, officers, directors, or professional employees of the professional corporation:

Medical corporation
1. Licensed doctors of podiatric medicine
2. Licensed psychologists
3. Registered nurses
4. Licensed optometrists
5. Licensed marriage and family therapists
6. Licensed clinical social workers
7. Licensed physician assistants
8. Licensed chiropractors
9. Licensed acupuncturists
10. Naturopathic doctors
11. Licensed professional clinical counselors
12. Licensed physical therapists
13. Licensed pharmacists
14. Licensed midwives
Podiatric medical corporation
1. Licensed physicians and surgeons
2. Licensed psychologists
3. Registered nurses
4. Licensed optometrists
5. Licensed chiropractors
6. Licensed acupuncturists
7. Naturopathic doctors
8. Licensed physical therapists
Psychological corporation
1. Licensed physicians and surgeons
2. Licensed doctors of podiatric medicine
3. Registered nurses
4. Licensed optometrists
5. Licensed marriage and family therapists
6. Licensed clinical social workers
7. Licensed chiropractors
8. Licensed acupuncturists
9. Naturopathic doctors
10. Licensed professional clinical counselors
11. Licensed midwives
Speech-language pathology corporation
1. Licensed audiologists
Audiology corporation
1. Licensed speech-language pathologists
Nursing corporation
1. Licensed physicians and surgeons
2. Licensed doctors of podiatric medicine
3. Licensed psychologists
4. Licensed optometrists
5. Licensed marriage and family therapists
6. Licensed clinical social workers
7. Licensed physician assistants
8. Licensed chiropractors
9. Licensed acupuncturists
10. Naturopathic doctors
11. Licensed professional clinical counselors
12. Licensed midwives
Marriage and family therapist corporation
1. Licensed physicians and surgeons
2. Licensed psychologists
3. Licensed clinical social workers
4. Registered nurses
5. Licensed chiropractors
6. Licensed acupuncturists
7. Naturopathic doctors
8. Licensed professional clinical counselors
9. Licensed midwives
Licensed clinical social worker corporation
1. Licensed physicians and surgeons
2. Licensed psychologists
3. Licensed marriage and family therapists
4. Registered nurses
5. Licensed chiropractors
6. Licensed acupuncturists
7. Naturopathic doctors
8. Licensed professional clinical counselors
Physician assistants corporation
1. Licensed physicians and surgeons
2. Registered nurses
3. Licensed acupuncturists
4. Naturopathic doctors
5. Licensed midwives
Optometric corporation
1. Licensed physicians and surgeons
2. Licensed doctors of podiatric medicine
3. Licensed psychologists
4. Registered nurses
5. Licensed chiropractors
6. Licensed acupuncturists
7. Naturopathic doctors
Chiropractic corporation
1. Licensed physicians and surgeons
2. Licensed doctors of podiatric medicine
3. Licensed psychologists
4. Registered nurses
5. Licensed optometrists
6. Licensed marriage and family therapists
7. Licensed clinical social workers
8. Licensed acupuncturists
9. Naturopathic doctors
10. Licensed professional clinical counselors
11. Licensed midwives
Acupuncture corporation
1. Licensed physicians and surgeons
2. Licensed doctors of podiatric medicine
3. Licensed psychologists
4. Registered nurses
5. Licensed optometrists
6. Licensed marriage and family therapists
7. Licensed clinical social workers
8. Licensed physician assistants
9. Licensed chiropractors
10. Naturopathic doctors
11. Licensed professional clinical counselors
12. Licensed midwives
Naturopathic doctor corporation
1. Licensed physicians and surgeons
2. Licensed psychologists
3. Registered nurses
4. Licensed physician assistants
5. Licensed chiropractors
6. Licensed acupuncturists
7. Licensed physical therapists
8. Licensed doctors of podiatric medicine
9. Licensed marriage and family therapists
10. Licensed clinical social workers
11. Licensed optometrists
12. Licensed professional clinical counselors
13. Licensed midwives
Dental corporation
1. Licensed physicians and surgeons
2. Dental assistants
3. Registered dental assistants
4. Registered dental assistants in extended functions
5. Registered dental hygienists
6. Registered dental hygienists in extended functions
7. Registered dental hygienists in alternative practice
Professional clinical counselor corporation
1. Licensed physicians and surgeons
2. Licensed psychologists
3. Licensed clinical social workers
4. Licensed marriage and family therapists
5. Registered nurses
6. Licensed chiropractors
7. Licensed acupuncturists
8. Naturopathic doctors
9. Licensed midwives
Physical therapy corporation
1. Licensed physicians and surgeons
2. Licensed doctors of podiatric medicine
3. Licensed acupuncturists
4. Naturopathic doctors
5. Licensed occupational therapists
6. Licensed speech-language therapists
7. Licensed audiologists
8. Registered nurses
9. Licensed psychologists
10. Licensed physician assistants
11. Licensed midwives
Registered dental hygienist in alternative practice corporation
1. Registered dental assistants
2. Licensed dentists
3. Registered dental hygienists
4. Registered dental hygienists in extended functions
Licensed midwifery corporation
1. Licensed physicians and surgeons
2. Licensed psychologists
3. Registered nurses
4. Licensed marriage and family therapists
5. Licensed clinical social workers
6. Licensed physician assistants
7. Licensed chiropractors
8. Licensed acupuncturists
9. Licensed naturopathic doctors
10. Licensed professional clinical counselors
11. Licensed physical therapists

Someone who’s not listed above may request to be enlisted as a shareholder of your professional corporation. While this is not always possible, there are some cases where it’s permitted for persons who are licensed in similar professions.

For example, in a California professional dental corporation, the corporation may have shareholders, directors, oﬃcers, or employees that are licensed in similar professions (registered dental assistants, dental hygienists, accredited dental assistants, etc). This can be done as long as they do not own more than 49% of the total stock of the dental corporation. Additionally, the quantity of non-dentist shareholders must not outnumber the number of licensed dentists in the corporation.

Next Steps

Now that you have a clearer understanding of who can be a shareholder in your corporation, make sure you are well-informed on your options and have a team on your side to guide you. An experienced CPA, healthcare attorney, broker, or another professional in this field can greatly help you with important decisions. Check out our article on Starting a Professional Corporation in California (The Right Way), or book an appointment with us for a consultation to help you get your California professional corporation started on the right track.