Corporations

There are currently two separate issues regarding the provision of physical therapy by corporations in California that are getting significant attention. The first issue is the practice of physical therapy by a general corporation, and is a result of an action taken by the Physical Therapy Board of California (PTBC) on November 3, 2010. The PTBC rescinded its 1990 resolution titled "Physical Therapy Corporation Ownership by a Layperson." The 1990 resolution allowed for the provision of physical therapy services by a corporation that is not organized as a professional corporation. The Board rescinded the resolution due to concerns that the resolution may be considered an underground regulation and be in conflict with provisions of the Moscone-Knox Professional Corporation Act.

The second corporation issue is in regards to the employment of physical therapists by a professional medical corporation. This issue was the subject of a Legislative Bill in 2009, and is the subject of an opinion issued by the Legislative Counsel Bureau in 2010. In 2011, the Legislature passed SB 543 prohibiting the Board from taking action against a phsycial therapist licensee solely for providing services as a professional employee of a medical, podiatric medical, or chiropractic corporation. October 3, 2011, Governor Brown signed SB 543 (Chapter 448, Statutes of 2011) into law.

Legislative Update from Governor Brown

SB 543 (Chapter 448, Statutes of 2011)

Legislative Counsel issued an opinion, dated September 29, 2010

DCA issued an opinion on February 28, 2011

What Type of a Corporation Can I Form?

A Professional Corporation consisting solely of physical therapists.

Pursuant to Section 2693 of the Business and Professions Code, "The name of a physical therapy corporation and any name or names under which it may render professional services shall contain the words "physical therapy" or "physical therapist", and wording or abbreviations denoting corporate existence.

Sections 2690-2693 of the Business and Professions Code, relating to physical therapy corporations are available under Laws and Regulations on the PTBC's web site.

The PTBC does not require individuals to register with the PTBC in order to form a corporation, nor does the name of the corporation need approval by the PTBC; however, the corporation must conform to the applicable statues and regulations. For further information on how to establish a Physical Therapy Practice or form a Corporation, please consult an Attorney, the California Physical Therapy Association, or the Secretary of State's office.

The PTBC is unable to provide consultation services regarding establishing a corporation.

Attorney General Opinion on Limited Liability Company

A health care profession is prohibited from being a Limited Liability Company.

AG Opinion No. 04-103 - Limited Liability Company