Choosing an entity for a California med spa
Can a California med spa be an LLC, or does it have to be a corporation?
A California LLC cannot hold a medical practice
A California med spa that provides medical treatments cannot be organised as an LLC, because state law does not permit an LLC to render professional services.
Corporations Code 17701.04(e) says so in terms: nothing in the LLC act permits a domestic or foreign LLC to render professional services in California, as defined in the Professional Corporation Act. Medicine is a professional service under that definition. Some states offer a professional LLC for doctors; California does not.
This surprises founders who have formed LLCs for other businesses and assume the same form works here. It works for the business side of a med spa, which is the management model on the MSO page, but not for the practice that employs the injectors and keeps the charts.
Corp. Code 17701.04(e)Corporations Code 17701.04(e) provides that nothing in the California LLC act permits a domestic or foreign LLC to render professional services in the state. — California Legislative Information, retrieved 2026-09-27
The professional medical corporation is the standard practice vehicle
A professional medical corporation, formed under the Moscone-Knox Professional Corporation Act, is the entity California specifically authorises to render medical services.
Business and Professions Code 2406 defines a medical corporation as one authorised to render professional services so long as it and its licensed shareholders, officers, directors and professional employees comply with the Moscone-Knox Act and the Medical Practice Act. The Medical Board is the governmental agency named for that purpose.
The corporation carries the ownership rules described on who can own a med spa: physicians hold the majority, listed licensees such as registered nurses and physician assistants may hold up to 49 percent together, and no lay investor may hold shares. It is formed on Form ARTS-PC for $100.
B&P 2406B&P 2406 defines a medical corporation as a corporation authorised to render professional services while it and its licensed participants comply with the Moscone-Knox Professional Corporation Act. — California Legislative Information, retrieved 2026-09-27
$100Articles of Incorporation of a Professional Corporation cost $100 to file with the California Secretary of State. — California Secretary of State, retrieved 2026-09-27
How the three common structures compare
Most California med spas use one of three structures: a physician practising as an individual, a medical corporation alone, or a medical corporation paired with a lay-owned management LLC.
The table sets out who can own each, what it costs to form, and the annual state filings each carries. A physician practising under their own name as an individual files nothing with the Secretary of State, but also has no entity between the practice's debts and personal assets. The medical corporation gives that separation for business obligations. The two-entity model adds a second company so a non-physician can own and be paid for the business side.
None of the three changes the clinical rules on who can perform treatments, which follow each person's license rather than the entity.
| Structure | Who may own | State formation fee | Annual state filings |
|---|---|---|---|
| Physician as individual | One licensed physician | None | None at the Secretary of State |
| Medical corporation | Physician majority; listed licensees up to 49% | $100 (ARTS-PC) | Statement of Information, $25 yearly; $800 minimum tax after year one |
| Medical corporation plus management LLC | Practice as above; LLC may be lay-owned | $100 plus $70 (LLC-1) | Both entities' statements and minimum taxes |
$70The California Secretary of State charges $70 to file Articles of Organization for an LLC on Form LLC-1. — California Secretary of State, retrieved 2026-09-27
$25 / $20The Statement of Information fee is $25 for California stock corporations and $20 for all limited liability companies. — California Secretary of State, retrieved 2026-09-27
The corporation's liability wall does not cover clinical negligence
A medical corporation separates the owners from the practice's business debts, but a clinician remains personally answerable for their own treatment of a patient.
This is the point where entity choice and insurance meet. A lease default or an unpaid supplier is the corporation's obligation. A burn from a laser treatment, or a vascular complication from filler, is a claim against the clinician who performed or supervised it, whatever entity employed them. The Medical Board's guidance is explicit that the physician carries ultimate responsibility for the patients whose care they delegate.
The protection for that exposure is professional liability insurance, not the corporate form. Insurance and workplace safety covers the employer obligations that sit alongside it.
The Medical Board's guidance states that under the Medical Practice Act, physicians have the ultimate responsibility for the care of their patients, including delegated treatments. — Medical Board of California, retrieved 2026-09-27
How each entity is taxed at the state level
Both a California corporation and a California LLC owe the state an $800 minimum each year, but a newly formed corporation is exempt for its first taxable year.
Revenue and Taxation Code 23153 sets the $800 corporate minimum and the first-year exemption. The LLC annual tax under section 17941 carried a first-year exemption only for LLCs organised from 2021 through 2023, so an LLC formed now pays from its first year. Federal tax treatment, including whether an S corporation election makes sense for the medical corporation, is a question for the practice's accountant.
The full calendar of recurring state obligations is on the taxes and annual filings page.
$800Revenue and Taxation Code 23153 sets an $800 minimum franchise tax and exempts a corporation that incorporates on or after 1 January 2000 for its first taxable year. — California Legislative Information, retrieved 2026-09-27
Pick the structure that matches who will own the equity
Match the structure to the owners: physicians alone can use a medical corporation, and the moment a non-physician wants equity, add a separate management LLC rather than bending the corporation.
A nurse partner fits inside the corporation as a minority shareholder. A lay investor does not fit inside it at all. Trying to give a lay partner a share of practice profits through side agreements is the pattern the Medical Board's guidance calls out, and the one that exposes the physician to discipline.
Once the shape is clear, the setup guide lists every filing in order. Write down the ownership of each entity before you file either one.
49 percentCorporations Code 13401.5 permits registered nurses to hold shares in a medical corporation, with all non-physician licensees together capped at 49 percent. — California Legislative Information, retrieved 2026-09-27
Questions
Can I form a PLLC for my California med spa?
California does not offer a professional LLC for physicians. Corporations Code 17701.04(e) bars LLCs from rendering professional services in the state, so the practice must be a professional medical corporation or an individual physician practice.
Can the medical corporation elect S corporation tax status?
Federal S corporation election is a tax choice made with the IRS, separate from the state entity type. Whether it suits a particular practice depends on its income and payroll, which is a question for the practice's accountant.
Does a sole physician practice need a fictitious name permit?
Only if it practises or advertises under a name other than the physician's own. A physician practising under their own name needs no permit; a spa brand name needs one from the Medical Board.