Instead of being an employee in a clinic, many physical therapists have ventured into business and started their own private practice. In other States, physical therapy clinics can choose to be an LLC or a corporation. In California, however, physical therapists can only form a professional corporation. This is the only business entity allowed by the California Secretary of State for occupations that require a license to practice. For more than a decade, Incorporation Attorney has assisted many physical therapists in forming their own professional corporations.  

What is the Definition of a Physical Therapy Professional Corporation? 

A physical therapy corporation is a type of corporation that is authorized to render professional services, as defined in Section 13401 of the Corporations Code. The shareholders, officers, directors, and employees of this private practice who are physical therapists must comply with the Moscone-Knox Professional Corporation Act. 

Is there a Specific Government Agency that Regulates Physical Therapy Clinics? 

Yes, the Physical Therapy Board of California is the specific government agency that regulates physical therapy clinics.

Do I need a Certificate of Registration as a Physical Therapy Corporation?

No. Any professional corporation or foreign professional corporation rendering professional services by persons duly licensed by the Board of Registered Physical Therapy shall not be required to obtain a certificate of registration in order to render those professional services.

California Code of Regulations § 1399.38. Certificates of Registration: Continuing Validity and Reports. [Repealed]

Most Common Questions Asked When Forming a Physical Therapy Professional Corporation in California 

In the many years of helping physical therapists start their own clinics in California, we’ve gathered the most common questions that we’ve been asked. Here are a few of them: 

Are Physical Therapy Corporations Required to Abide by Specific California State Laws and Codes Specific to Their Profession? 

Yes! Physical therapy clinics must abide by the following State laws and codes: 

1. California Corporations Code 
2. Business and Professions Code – The Physical Therapy Practice Act is found in the California Business and Professions Code starting with Section 2690.  
3. California Code of Regulations Sections 1399.30 through Section 1399.41 

Read more about these laws and codes by jumping to the last section of this page! 

Are There Name-style Formalities that Physical Therapy Corporations Must Adhere to? 

The name chosen for a physical therapy corporation must comply with the California Business and Professions Code 2693. The name of the clinic and any name or names under which it will render professional services must contain the words “physical therapy” or “physical therapist.” The business name must also include wording or abbreviations denoting corporate existence. 

Can a Physical Therapy Private Practice Use a Fictitious Name in California? 

Yes. Physical therapy clinics are allowed to use a fictitious name or a Doing-Business-As (DBA) by the Physical Therapy Board of California. 

When Should Bylaws be Created in a Physical Therapy Professional Corporation in California? 

Bylaws are created so that a company can have corporate and operational guidelines. A physical therapy corporation in California must have its bylaws established as early as its formation.  

Who can be Sold Shares in a Physical Therapy Corporation in California? 

The bulleted list of licensed individuals below may be shareholders of a physical therapy professional corporation. 

• Licensed physicians and surgeons. 
• Licensed doctors of podiatric medicine. 

• Licensed acupuncturists. 
• Naturopathic doctors. 
• Licensed occupational therapists. 
• Licensed speech-language therapists. 
• Licensed audiologists. 

• Registered nurses. 
• Licensed psychologists. 
• Licensed physician assistants. 
• Licensed midwives. 

The sum of all shares owned by these persons must not exceed 49 percent of the total number of shares of the company. Also, the number of stockholders in the corporation must not exceed the number of persons licensed by the Physical Therapy Board of California. It’s important to note that this rule does not limit employment by the clinic to only these licensed professionals listed. A physical therapist can be a shareholder in more than one professional corporation. 

Who Can Serve as an Officer or Director of a Physical Therapy Clinic? 

The same licensed individuals allowed to own shares in a physical therapy corporation can also serve as an officer or director in the company. The following are exceptions to the rule: 

1. If a physical therapy corporation only has one stockholder, that same stockholder can also serve as the director, president, and treasurer of the company. In cases like this, the other officers of the corporation are not required to be licensed persons.  
2. If a physical therapy private practice in California only has two shareholders, then that company only needs two directors. The two shareholders, between themselves, can fill the offices of the president, vice president, secretary, and treasurer.

Want to Open a Physical Therapy Clinic in California? Consult an Expert Attorney on How to Form a Professional Corporation! 

The entity of choice for physical therapists who want to start a private practice in California is a professional corporation. The process of forming a corporation must be completed correctly, to avoid legal and corporate problems in the future. Consult a business lawyer that specializes in the formation of physical therapy professional corporations in California! Call Incorporation Attorney at +1 (714) 634-4838!

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