One of our clients, Wilma Flintstone, who has gone through the process of naming a licensed clinical social worker corporation, knows a thing or two about making mistakes and rejection. A series of missteps caused a delay in setting up her private practice.
For those who are also planning to build their own clinics, this account will serve as guide on how to start a private practice as a LCSW in California and what to do in case you stumbled.
What is a Professional Corporation for Licensed Clinical Social Workers?
Professional corporation for licensed clinical social workers is a type of entity that allows LCSW professionals to provide emotional and mental health services. These private practices are registered under the California Secretary of State and regulated by the California Board of Behavioral Service. Failure to comply with the rules set by this agency will result in sanctions and penalties.
LCSW professional corporations are allowed to use DBS (Doing Business As) under the California Board of Behavioral Service, so long as the name is not false, misleading, or deceptive.
Making Mistakes During the Process – Can These Be Fixed?
Setting up a professional corporation can be difficult when you’re setting up an LCSW corporation without legal assistance. Wilma can attest to this after experiencing some issues while in the process of naming a LCSW corporation in California.
In an attempt to handle the corporation process single-handedly, (1) she applied and received her EIN, (2) submitted the articles of incorporation for review, and (3) filed form 2553. It’s a common mistake for new entrepreneurs to do these tasks, such as accounting and legal, that must be left to professionals. Most times, you may rely on internet searches to gather information, which turns out to be incorrect or misleading.
While some businesspeople can do away without legal assistance if they intend to set up a small ice cream shop, others could face serious consequences if they are setting up a professional service like a LSCW corporation.
As stated in the California Business and Professions Code 4987.6.: “It shall constitute unprofessional conduct and a violation of this chapter for any person licensed under this chapter to violate, attempt to violate, directly or indirectly, or assist in or abet the violation of, or conspire to violate, any provision or term of this article, the Moscone-Knox Professional Corporation Act (Part 4 (commencing with Section 13400) of Division 3 of Title 1 of the Corporations Code), or any regulations duly adopted under those laws.”
It means that professionals setting up a LCSW professional corporation in California must strictly follow the rules or you risk making mistakes and doing it all over again. Unfortunately, this was the case with Fred.
Problem 1: How do you name a LCSW corporation in California?
Wilma made the mistake of applying for an EIN first with the legal name as “Wilma Flintstone LCSW Corp.”. She found out later that this was rejected by the Board of Behavioral Sciences (BBS). If you are setting up your licensed clinical social worker corporation, you should remember that any name or names you use shall contain the words “licensed clinical social worker” and wording or abbreviations denoting corporate existence. In Wilma’s case, the name must be changed to: ‘Wilma Flintstone Licensed Clinical Social Worker Corp.’ After that, she has to inform the Secretary of State and the IRS of this change.
Regarding the EIN, Wilma must resubmit an application for EIN because the corporate name will be different from the one indicated in the initial application. Afterward, she can write a letter to the IRS explaining the mistake made.
Problem 2: Filling out form 2553 first before the Articles of Incorporation was approved
Wilma filled out form 2553 first before the articles of incorporation were even approved. On the form, the indicated date of the corporation’s formation was 9/14/2022, which was incorrect because it has not been approved yet. Also, the Secretary of State returned the submission due to the incorrect statement of purpose.
Unfortunately, at this time the name of the corporation is still wrong. It is not the obligation of the California Secretary to ensure that a professional followed all the namestyle rules. Even if the Secretary of State approves the articles of incorporation, you must still follow the rules governing a licensed clinical social worker.
Wilma also has to resubmit form 2553 to include the date the articles of incorporation were approved instead of the date the articles of incorporation formation were submitted.
Problem 3: Obtaining a business license
Wilma has already applied for a business license with Los Angeles County and now has a temporary license. However, because the articles of incorporation were done incorrectly, she will need to get back all the effort put into obtaining a business license from Los Angeles County.
Setting up a Professional Corporation: A Concise Guide for LCSW
At face value, setting up and naming a LCSW corporation in California is easy, as long as you follow the process to the letter. You can start your private practice after doing these steps:
- File your company’s articles of incorporation with the Secretary of State
- Apply for an EIN (employer identification number)
- Fill out and submit form 2553
- Pay the required taxes
- Apply for a business license
Before you get started, be warned that a few more tasks should be done in between these steps. And somewhere along the way, you might forget a few small details which could take you back to square one. While you can check off your to-do list all on your own, seeking legal assistance will make a big difference.
How Can You Avoid Mistakes in Naming a LCSW Corporation?
As much as you want to fully enjoy the formation of your company, including naming a LCSW corporation, major and minor errors could cause huge delays and preempt your celebration. Sure, you can rework the whole process from top to bottom, but remember that it comes with a price.
By consulting with lawyers who can help you from day one, you can start your private practice and start working quickly. Our corporate lawyers at Incorporation Attorney can help you! We are a trusted firm with years of experience and proven track record. If you are having issues or want to avoid issues in naming a LCSW corporation, contact us today +1 (714) 634-4838 or explore our website for more information.
