Lawyer for Physicians, Medical
Corporations and Group Medical Practices
Legal compliance checklist
for a medical corporation
In this suite of articles, I explain the basic
corporate, business and contract law issues for medical
corporations and group medical practices in California.
I explain things from both sides, that is, the perspectives
of both the individual physician and the group practice.
The articles in this suite are:
In my last article, I ask the threshold
question,
Should
you incorporate your medical practice?
In this article, I give you a legal compliance
checklist for your medical corporation.
Incorporating a medical practice can feel
overwhelming. There are so many unknowns to cause you
anxiety. I write this
checklist to fill in the unknown. This checklist gives you
a bird’s eye view of legal compliance for your start-up
medical corporation.
Let's start at the beginning -
incorporation.
Form the Medical
Corporation
Your basic choices are a C corporation
or an S corporation (you may not use an LLC for a medical
practice). The law is tricky for medical corporations,
so use an attorney who knows medical corporation law to
draft your corporate documents (articles, bylaws, stock
certificates, etc.). For related information on who
can own a medical corporation, see my article,
How a non-licensed person can work with a medical
practice, including the use of an administrative /
management service company.
Shareholders /
Buy-Sell Agreement
If your practice has more
than one owner / doctor, seriously consider getting a
shareholders / buy-sell agreement to govern your
relationship with your partners. These agreements save
you a lot of money if partner relations go bad.
A buy-sell
agreement resolves disputes between the partners, including
exit provisions if the partners can’t work together anymore.
I call this the partners’ economic divorce. For more
info, read
Shareholder
buy-sell
agreements for medical corporations.
Choose a Location
First decide on a general location, then check local zoning
requirements to be sure you can operate a medical practice
there. Visit your local planning / permits department for
this and other local requirements for your location.
Real Property Lease
One of the most important contracts you’ll sign is the lease
for your offices. The lease will bind you for years to
come, and you’ll have to continue paying rent even if the
practice doesn’t perform well. This is another area where
you need a lawyer.
Fictitious Name Permit
A
fictitious name is a dba or some name other than the medical
corporation’s legal name.
In most cases,
you must obtain a fictitious name permit from the Medical
Board / Division of Licensing.
You also might need a separate fictitious name filing
with your local county recorder’s office.
Trademarks
If your medical
practice will rely on a special business name or trademark
(as is the case for med spas, for example), find out if
anyone else has prior rights to use the business name.
Search the internet to see if anyone is using your name for
medical practices within your geographic scope. Your
geographic scope relates to how far you look for patients.
If your internet searches come up clean, consider getting a
trademark on your name. If your searches show problems, talk
to a lawyer about what to do next.
And More
Get a Federal
Employer Identification Number (EIN). You can call the IRS for your EIN or get it from the
IRS’ website.
Bank Accounts.
Once you have the articles of incorporation plus EIN, you
can open bank accounts.
Local Business
License. Get a
license to do business from your city.
Seller’s Permit.
If you sell merchandise, get a seller’s permit from the
California State Board of Equalization.
Employer Filings and Withholdings.
If you have employees, file form DE-1 with California EDD.
This starts the never-ending process of employment law
compliance. Hire a payroll company to handle your employee
wage withholdings.
Workers Compensation and Other
Insurance. Once you have
employees, get an insurance broker for workers compensation
insurance. Workers comp is required by law.
Use an experienced
broker to purchase your professional malpractice insurance.
That’s it for this bird’s eye view of the start-up of your
medical corporation. I hope this checklist has been helpful
to you.
Call me to schedule a
legal consultation: 510-796-9144
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