California has a unique corporate entity for medical and healthcare applications as well as those with a professional license. When should you elect to form a California Professional Corporation or PC over an S-Corporation, C-Corporation or LLC? The California Professional Corporation provides distinct advantages to doctors, physicians, dentists, as well as healthcare and medical professionals. In addition, professionals who must be licensed by the State of California such as engineers, architects, Certified Public Accountants or CPAs and lawyers.
California law defines a licensed person as someone who is “duly licensed under the provisions of the Business and Professions Code to render the same professional services as are or will be rendered by the professional corporation of which he or she is or intends to become, an officer, director, shareholder, or employee.”
- The unique benefits provided by a California PC include (but are not limited to):
- Increased contributions to 401(k) or retirement accounts
- Separation of liability for malpractice or other legal exposures from other professionals in the practice
- The ability of the PC to offer and receive tax deductions for costly employment benefits such as:
- Health Insurance
- Disability Insurance
- Dependent Care
- Life Insurance
There are many restrictions on issues such as ownership and voting rights and this may affect your desire to elect to form a California Professional Corporation or PC your business entity. The entity may not be owned by or offer voting rights associated with corporate officers, directors and shareholders to anyone who is not a licensed professional in good standing.
These decisions require the advice and guidance of one of San Diego’s most experienced medical professional and healthcare business law firm: The Watkins Firm. We have served the San Diego region for decades and provide extensive experience and expertise to medical, healthcare and professional service businesses. We invite you to contact us or call for a free consultation at 858-535-1511.