Yes — in California, a physician assistant (PA) can own or co-own a medical practice, but not independently and not without physician oversight.
California follows the Corporate Practice of Medicine (CPOM) doctrine, which restricts who can own and control medical practices. While PAs are licensed professionals, they cannot independently own or control a medical practice in the same way a physician can.
Instead, ownership must be structured through a professional corporation and comply with strict rules around physician supervision, clinical control, and regulatory oversight set by California law.
Below, we break down exactly what physician assistants can and cannot do when it comes to owning a medical practice in California.
Same Codes, Different Perspectives
Incorporation laws in the state of California can be complicated for licensed professionals who are new to running a business. Even corporate lawyers themselves can be misinformed. Here’s a perfect example:
Our client needed help writing a contract to hire a physician assistant as an independent contractor and act as supervising physician. She then consulted a lawyer who claimed that this was against California law, which states that only physicians can own medical practices. And that to conduct a medical business, physicians must own 51% of the business. The lawyer also stated that PAs could not run a medical practice and hire a physician as an employee or contractor.
In the context of a professional medical corporation, the lawyer is correct. Licensed physicians can own 51% of the shares, while the co-shareholders who are non-physicians can own up to 49%. Presumably, this is in reference to California Corporations Code 13401.5 (which we will also use to refute the lawyer’s claim). However, understand that a professional medical corporation is completely different from a physician assistant corporation–and so are the ownership regulations.
Can Physician Assistants Own Their Own Practice in California? Two Things You Need to Look At
First, we asked the client one of the important questions: “What are you trying to accomplish?” This is crucial in determining whether a physician assistant can act as a majority owner and hire licensed physicians as employees is permissible in the state of California.
In order to determine whether a physician assistant can own a professional corporation, and whether a physician assistant can hire licensed health professionals (i.e., doctors, surgeons, etc), we need to look at the type of corporation.
It’s important to note that no matter the corporation, if a “supervising physician” is required, a physician assistant cannot act in that role currently.
A. A Physician Assistant Corporation is Designated Under Corporations Code 13401.5
It is as simple as this: If you want to form a professional medical corporation, you need at least 51% physician ownership. On the contrary, you need at least 51% physician assistant ownership if you want to form a physician assistant corporation.
While the physician assistant can own at least 51% of the shares, the co-shareholders can own up to 49%. Among the licensed professionals who are allowed to be co-shareholders under the physician assistant corporation include:
- Licensed physicians and surgeons
- Registered nurses
- Licensed acupuncturists
- Naturopathic doctors
- Licensed midwives
B. A Physician is Duly Licensed Under Division 2 of the Business Professions Code
Are physicians duly licensed under the Division 2 of the Business Professions Code (BPC)? The answer is yes, and the details are found in the Business and Professions Code of 2011 California Code under Division 2 (Healing Arts [500 – 4999.122]) Chapter 7.7, Article 8 Here, it also authorizes physician assistant corporations to render professional services. You may check the following codes for further details:
- DIVISION 2. HEALING ARTS [500 – 4999.129] (Division 2 enacted by Stats. 1937, Ch. 399.)
- CHAPTER 5. Medicine [2000 – 2529.6] (Chapter 5 repealed and added by Stats. 1980, Ch. 1313, Sec. 2.)
- ARTICLE 1. Administration [2000 – 2028.5] (Article 1 added by Stats. 1980, Ch. 1313, Sec. 2.)
Chapter 2000 shall be known and may be cited as the Medical Practice Act. Whenever the provisions of any statute refer to the Medical Practice Act, it refers to the provisions of this chapter.
Who Can Own a Medical Corporation in California?
Medical professionals who are designated under the Division 2 of the Business and Professions Code and can own a medical professional corporation include:
- Doctors of podiatric medicine
- Licensed optometrists
- Registered nurses and licensed psychologists
- Licensed marriage and family therapists and clinical social workers
- Licensed physician assistants
- Licensed chiropractors and acupuncturists
- Naturopathic doctors
- Licensed professional clinical counselors, and physical therapists
- Licensed pharmacists
- Licensed midwives
We provide detailed steps on how to form a professional medical corporation in this article.
Can A Physician Assistant Hire a Licensed Healthcare Professional?
The California Corporations Code 13401.5. states that a professional corporation may employ any person duly licensed under Division 2 of the Business and Professions Code (BPC). Since physicians are among those duly licensed under Division 2 of the BPC, a professional physician assistant corporation may hire a licensed physician to render professional services.
In summary, physician assistants can hire licensed healthcare professionals as long as the physician assistant corporation is operating within its bounds and the professional you want to hire is covered under Division 2 of the BPC.
Frequently Asked Questions About Physician Assistants Opening Their Own Medical Practice
What is the Corporate Practice of Medicine (CPOM) doctrine?
CPOM is a legal doctrine restricting ownership/control of non-physicians in medical practices. It ensures that clinical decisions remain under the authority of licensed physicians.
Can a physician assistant open their own practice in California?
Not independently. A PA may participate in opening a practice, but it must be structured under a physician-led professional corporation and comply with supervision and regulatory requirements.
Can a physician assistant fully own a medical practice in California?
No. A PA cannot independently control a medical practice. Under CPOM rules, clinical control must remain with a licensed physician, and PAs must operate under physician supervision.
What entity type is required for a medical practice that involves physician assistants?
Medical practices in California must generally be formed as a Professional Corporation (PC) owned by licensed physicians, with any PA involvement structured in compliance with CPOM and supervision rules.
Still Confused If Physician Assistants Can Own Their Own Practice or Have Ownership in a Medical Practice in California? We’ll Help!
If you are a PA looking to start your own medical practice, there’s hope with a physician assistant professional corporation. Knowing the laws that cover this brings you closer to your dream of running your own clinic in California. We understand how the codes for California corporate practice of medicine for a physician assistant can be confusing but things become clearer with the help of experienced corporate lawyers.
Incorporation Attorney offers legal services that can help you set up your physician assistant corporation or medical professional corporation. We have helped numerous start-ups over the years and we continue to offer guidance on legal matters whenever necessary. If you need our corporate expertise, call us right away +1 (714) 634-4838 or explore our website for more information.
