Starting a medical partnership in California

It’s not unusual for medical professionals to dream about owning their own partnership, but California’s laws surrounding such partnerships are somewhat different than in other states.

In addition, medical partnerships can run into unexpected complications when it comes to finding a lease for their practice. If you’re thinking about opening your own practice (solo or with other medical professionals), here are a few things you should know:

Forget about LLCs: You need a professional medical corporation

In many states, medical partnerships use a limited liability corporation (LLC) as their operating structure — but that’s off the table in California.

The Moscone-Knox Professional Corporation Act requires medical providers, such as primary care physicians, surgeons, chiropractors and psychologists, to create a professional medical corporation instead.

These corporations do help medical providers limit their personal liabilities (in case the business goes south or there are extensive malpractice claims), and they provide similar tax benefits to an S-Corporation. However, they’re somewhat more complex to set up than an LLC.

Medical practices also have some complex commercial lease issues

Once you’ve established your professional medical corporation, you need to find a place for your patients to visit — and that can be tricky. Aside from the typical issues associated with commercial lease negotiations, you may need to address things like:

• The parking spaces that will be allocated for your patients, including those with disabilities
• The use of medical devices on the property and how that will affect your utility bills and other rental obligations
• The storage of medical materials on the property and additional security measures to protect valuable assets
• Any problems regarding the issue of medical waste and its removal
• HIPAA concerns related to the storage of patient records on the site

This process doesn’t have to be frustrating. Learning more about the practical concerns of opening your own medical partnership can help you make your dreams a reality.