Video Summary:

In this transcript from a video by Gale&Vallance, Andy Gale, a small business attorney based in Orange County, explains the important rules surrounding professional entities for nurses in California. The key question discussed is: can a nurse form an LLC in California? Andy clarifies that nurses, like other licensed medical professionals, cannot form a Limited Liability Company (LLC) if their intent is to practice nursing. Instead, they must comply with strict requirements under the California Corporations Code and Business and Professions Code, which govern nursing corporations, shareholder restrictions, and professional service regulations.

To learn more about choosing the right structure for your practice and staying compliant, check out our detailed article on California nurse business entity options.

This video from Andy Gale at Gale & Vallance is provided for general educational purposes only. It does not constitute legal advice, and we strongly recommend contacting a qualified attorney regarding your specific case.

Transcript

00:00:04 – Introduction

hi my name is Andy gale I’m a small business attorney and I had an inquiry this week from a CPA that I work with she had made an inquiry on behalf of a nurse who was interested in forming a professional entity in the state of California.

00:00:19 – Nurse Wants to Form an LLC

the nurse had her heart set on forming a limited liability company and the CPA called me to see whether or not it was possible to do that. the answer of course is no a nurse cannot set up a limited liability company if what she wants to do is practice the profession of Nursing in her business.

00:00:39 – Exception for Non-Medical Businesses

of course if you wanted to have a dog washing business or manufacturer tools or something like that then there would be no problem in the state of California.

00:00:48 – Regulation of Licensed Medical Professionals

if you are a licensed medical professional the services that you provide are regulated by your respective board in this case the Board of Registered Nursing and by the corporation’s code and the business and Professions Code.

essentially if you want to be a professional and practice your business you are regulated by a very specific section of both of those codes and by that particular board and it lays out the specific requirements for a corporation in order to be able to provide those services.

00:01:20 – Shareholder Restrictions

for example the only people who can be shareholders of that corporation are people typically who hold that license. so let’s say that I’m an attorney can I be a shareholder of a nursing corporation? the answer is not because I’m not a licensed nurse.

in the case of nurses there are a very short list of other people who could be a shareholder of the corporation but typically there are also licensed medical professionals. for example a doctor could be a shareholder in a registered nurse’s corporation.

00:01:53 – California LLC Act Limitations

now the state of California recently promulgated, that is sort of set up, a new limited liability company Act and one of the shortfalls of that Act is that there are no code sections within that Act that provides for a limited liability company to provide professional services.

so since it’s not provided for in the limited liability company Act and it’s all very regulated by the corporation code and by the business professions code that’s the only place where the nurse can get the legal authority to set up the corporation and therefore practice or business.

00:02:29 – Closing & Invitation for Questions

if you have any other questions about medical professional corporation, setting up one for a nurse or a physician’s assistant or a doctor, we’d be more than happy to answer any questions. please give us a call. again my name is Andy gale.

Conclusion – Can a Nurse Form an LLC in California?

As explained by Andy Gale from Gale & Vallance, the answer to “can a nurse form an LLC in California?” is no—licensed nurses cannot form an LLC if their purpose is to practice nursing. Instead, they must form a professional nursing corporation that complies with California’s Corporations Code and Business and Professions Code. Shareholder rules, board regulations, and strict compliance requirements make it important for nurses to seek legal guidance when choosing the right business entity.