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Commercial Leases – Good Reasons to be Reviewed by an Experienced Attorney

A commercial lease is a legally binding contract between a tenant (business or organization) and a landlord. The specific terms of the lease matter. They will govern the relationship between the commercial landlord and the commercial tenant. A lawyer should always review a commercial lease. Your attorney will ensure that the terms of the lease are clear, fair, and reasonably aligned with your business’s long-term needs. Here, our Fremont business attorney explains why it is so important to have your commercial lease reviewed by an attorney.

Commercial Leases are Lightly Regulated in California

In California, commercial leases are not subject to the same regulations as residential leases. Commercial tenants have less protection under landlord-tenant law. They are largely protected by contract law. Indeed, commercial leases are largely dictated by the terms agreed upon by both parties, and courts will generally enforce them as written. Without legal review, a business may unknowingly commit to burdensome terms, hidden fees, or one-sided obligations that could hinder the operations of your company and undermine its financial well-being.

Note: On January 1st, 2025, Senate Bill 1103 (SB 1103) took effect in California. The law provides some additional legal protections for “qualified commercial tenants.” These tenants are generally very small businesses, particularly in the restaurant industry.

Important Provisions to Be Aware of in a Commercial Lease

With a commercial lease, the basics always matter. You need to know about things like the monthly rate, the duration of the agreement, and any restrictions on the use of the property. Beyond that, commercial leases in California also often include additional (important) provisions, such as:

CAM/net charges: Common area maintenance (CAM) and net charges often include costs for property upkeep, but a key issue is whether major asset replacements or property improvements can be passed directly to the tenant. Without clear lease terms, tenants may be responsible for significant costs, such as roof repairs or an HVAC replacement.
CAM/NNN (included/excluded costs): Commercial tenants should carefully review what expenses are included in CAM and NNN charges. In some cases, landlords may attempt to shift excessive costs onto tenants. Some leases allow landlords to pass through expenses such as administrative fees, capital improvements, or largely unrelated operational costs.
Duty to repair and replace: A lease should clearly define which party is responsible for repairs and replacements, particularly for critical systems like plumbing, HVAC, and structural elements. Some agreements make the tenant responsible for maintaining all or part of systems even if they were at the end of their lifespan when the lease began.
Renewal (options to extend a lease): You need to understand your right to renew. An option to extend a lease is not always an automatic renewal. Rather, it may be a right that must be properly exercised under specific conditions. Tenants should carefully review the terms, including rent adjustments, deadlines for exercising the option, and any additional requirements that may limit their ability to renew.

Contact A California Commercial Lease Review Attorney Today

Lynnette Ariathurai is a California business attorney with extensive experience drafting, negotiating, and reviewing commercial lease agreements. If you have any questions about a commercial lease, we are here to help. Contact us today for a fully confidential, no obligation initial consultation. With an office in Fremont, we handle commercial lease reviews throughout the Bay Area.

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What is Private Mediation and How Does it Work to Resolve a Dispute?

Is your business locked in any type of dispute? If so, you are undoubtedly looking for the best option to resolve the problem in a favorable manner. Litigation has a lot of downsides—it can be time-consuming and expensive. Mediation is a form of non-adversarial alternative dispute resolution (ADR). Lynnette Ariathurai is a California lawyer with extensive experience handling business mediation. Here, our Fremont business attorney explains what private mediation is and discusses how it works to move a commercial dispute towards a resolution.

What is Private Business Mediation in California?

In California, private mediation is a voluntary, non-adversarial process that is an alternative to litigation. As explained by the California Department of Consumer Affairs, mediation is when “a neutral person(s) facilitates communication between the disputants to assist them in reaching a reconciliation, settlement, or other understanding” in a structured environment where parties to a dispute—including a commercial dispute—can attempt to work out a settlement.

How Mediation Works to Resolve a Dispute in California

Mediation can be a highly effective tool for resolving disputes in California—especially in cases where parties have at least some common ground, are interested in preserving a relationship, and/or want to avoid the time and cost of litigation. Here is an overview of how private mediation works:

The parties must agree to mediate: Private commercial mediation is voluntary in California. The process does not start until the parties to a dispute agree to mediate. For mediation to be effective, all parties must have a good faith intent to resolve the matter.
A neutral mediator is selected: The mediator is a trained professional who helps to facilitate communication and negotiation. The parties to a business dispute must select an agreed-upon mediator. It is best to look for a mediator with relevant experience.
You need to prepare for mediation: Proper preparation is key to mediation—not just to get the best outcome, but also to help move the case towards dispute resolution. You should gather and prepare all relevant evidence.
The mediator helps to facilitate resolution: The role of the mediator is to help facilitate the resolution of a dispute. To be clear, the mediator is not empowered to make any final decisions. It is their role to clarify key issues and facilitate a resolution.
Agreement is voluntary—parties can withdraw: In California, business mediation is fundamentally voluntary. The parties are not required to agree to a settlement. They retain the right to withdraw from mediation without an agreement if one cannot be reached.

Business mediation is complicated. To get the most out of the process, it is crucial that you and your company are properly prepared and that you know what to expect. A top-tier California business mediation lawyer can help you navigate all aspects of the process.

Contact Our California Business Mediation Attorney Today

Lynnette Ariathurai is a California business mediation lawyer who is committed to helping companies find the best solution. If you have any questions about the mediation process for dispute resolution, please do not hesitate to contact us for a fully confidential, no obligation consultation. From our Fremont office, we provide business mediation services throughout the Bay Area.

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Arbitration Clauses in a Contract: When Arbitration Can and Cannot be in a Contract in California

Arbitration is a private dispute resolution process where parties agree to have a neutral third party (the arbitrator) hear their case and make an (often) binding decision. It is not uncommon for business contracts—but commercial agreements and employment agreements—to contain mandatory pre-dispute arbitration clauses. You may be wondering: Is an arbitration clause enforceable in California? The answer is presumptively “yes”—but there are certain requirements that it must meet. Here, our Fremont business lawyer explains the key things to know about when an arbitration clause can and cannot be in a contract in California.

Arbitration Clauses are Generally Enforceable in California

A pre-dispute arbitration clause is a contractual provision requiring parties to resolve future disputes through arbitration instead of litigation. It is commonly included in consumer, employment, and commercial contracts. California lawmakers have long viewed mandatory arbitration provisions with skepticism. In 2019, Assembly Bill 51 (AB 51) was passed in the state to prohibit employers from requiring employees or applicants to sign arbitration agreements as a condition of employment. However, its enforcement was challenged. On January 1st, 2024, a federal court issued a permanent injunction. The court determined that the Federal Arbitration Act (FAA) preempts AB 51. As such, arbitration clauses for employment contracts are still lawful in California.

While Permissible, Arbitration Clauses Must Meet Certain Standards in California

Even though AB 51 never took effect, mandatory arbitration clauses must meet certain criteria to be lawful in California. The California Supreme Court set the standard in the case of Armendariz v. Foundation Health Psychare Services, Inc. Here are five key elements:

Arbitrator must be neutral: In California, arbitration clauses must ensure that the arbitrator is impartial and free from any conflicts of interest.
More than minimal discovery must be allowed: While arbitration does not include a full discovery process, it cannot be limited to only “minimal” discovery.
Fees for the arbitration cannot be unreasonable: Businesses and employers cannot impose excessive arbitration costs on customers and employees.
All forms of relief available in court must be possible remedy: Arbitration agreements must not limit the types of damages or remedies that a party could otherwise seek in court.
The arbitration must be decided in writing: Finally, the arbitrator must make his or her decision in writing with a basic explanation of the basis of the ruling.

Beyond that, a mandatory arbitration provision in California may also potentially be considered invalid and unenforceable if it is substantively unconscionable. For example, a contract arbitration clause that requires an employee to waive all PAGA claims rights has been previously deemed overly broad and substantively unconscionable by courts.

Speak to Our California Arbitration Attorney for a Confidential Consultation

Lynnette Ariathurai is a California business lawyer who has the experience to help companies and employers with the full range of arbitration cases. Contact us today for a fully confidential, no obligation initial consultation. With an office in Fremont, we serve business throughout the region, including in Union City, San Leandro, San Jose, and Santa Clara.

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Forming a Medical Corporation

Are you considering forming a medical corporation in the Bay Area? It is crucial that you have the knowledge and resources to put the best structure in place for your business. There are special rules and regulations for the formation of professional medical corporations in California. Here, our Fremont attorney for starting a business highlights the dos and the don’ts for forming a medical corporation in California.

The Dos and Don’ts for Forming a Medical Corporation in California

DO Ensure Full Compliance With California Ownership Regulations

There are special requirements for the ownership of medical corporations in California. The Moscone-Knox Professional Corporation Act mandates that medical corporations in California must be owned by licensed professionals. Further, licensed physicians must hold at least 51 percent of shares. The remaining (minority) ownership may be limited to certain allied health professionals. Unauthorized ownership can lead to serious regulatory sanctions.

DO Follow California Naming Conventions for Medical Corporations

California imposes strict naming requirements for medical corporations to prevent misleading or deceptive business identities. The corporation’s name must include “Medical Corporation” or a similar professional designation. It should reasonably align with the physician’s licensed name.

DO Clearly Separate the Clinical Practice from Administrative Matters

A well-structured medical corporation should maintain a clear distinction between clinical decision-making and business operations. Physicians must retain full control over medical judgments and patient care. Administrative staff and even third party companies can handle other matters, such as finances, billing, marketing, and human resources (HR).

DO File a Statement of Information Within 90 Days of Incorporation

When you form a medical corporation in California, you should file a Statement of Information with the California Secretary of State within 90 days of incorporation. Be proactive: Make sure all the required business formation paperwork is filed in a timely manner. You can use Form SI-550.

DON’T Violate California Licensing Requirements

Physicians who form a medical corporation should always be in full compliance with our state’s licensing requirements. Every shareholder, director, and officer of a medical corporation must hold a valid license in their respective field as per the California Business and Professions Code.

DON’T Neglect Corporate Record-Keeping Requirements

Medical corporations in California are subject to strict record-keeping requirements. Maintaining accurate and up-to-date corporate records is a legal requirement under California corporate law. A medical corporation must document meeting minutes, bylaws, stock issuance, tax filings, and financial records.

DON’T Mishandle Sensitive Patient Medical Records

A patient’s medical records are protected under the federal Health Insurance Portability and Accountability Act (HIPAA) and the California Confidentiality of Medical Information Act (CMIA). Mishandling medical data—whether through improper storage, unauthorized access, or insecure disposal—can lead to serious penalties.

Contact Our California Medical Corporation Formation Attorney Today

Lynnette Ariathurai is a California business formation lawyer with extensive experience helping clients navigate the dos and don’ts of forming medical corporations. Contact us today for a fully confidential, no obligation initial consultation. With an office in Fremont, we help entrepreneurs form medical corporations throughout the region, including in Newark, Hayward, East Bay, and Milpitas.

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Construction Contracts: What is Required to Be in a Home Improvement Contract for Residential Construction?

According to the data cited within the California Residential Remodeling/Renovation Market Study, home improvement is a multi-billion dollar industry in the state. For contractors, the remodeling and renovation business offers many different opportunities. Home improvement projects in California that exceed $500 in cost require a proper license and a written contract. Within this article, our California business lawyer highlights key things that are required to be in a home improvement contract for residential construction.

California CSLB Regulates Home Improvement Contracts

The Contractors State Licensing Board (CSLB) regulates residential home improvement contracts in California. As a construction company or contractor, it is imperative that you ensure full compliance with all CSLB requirements. A well-drafted contract not only ensures that your company will meet regulations, but it can also protect you if a dispute arises with a homeowner.

Key Requirements for a Home Improvement Contract in California

What does a contract for a residential home improvement project need to include in California? Here is an overview of the most notable requirements from the CSLB:

In writing: Home improvement contracts in California must be in writing to comply with CSLB regulations. A written contract helps to ensure clear terms. If your business is doing a home improvement project for $500 or more, the agreement must be in writing.
Contractor identification: The home improvement contract must include the contractor’s full name, address, license number, and contact information. It is imperative that a contractor accurately identifies itself within the agreement.
Description of materials and work: In California, a contract for a home improvement should also include comprehensive details of the materials and work. It should clarify the specific materials, quantities, and the scope of work.
Permitting information: There should also be terms regarding any permits that will be needed to complete the project. Among other things, this part of the agreement should clarify who is responsible for obtaining the permit(s).
Detailed payment schedule: A payment schedule, including the down payment and installment amounts, must be clearly outlined. All contractors engaged in residential home improvement work should note that California law puts limits on down payments ($1,000 or 10 percent of the contract, whichever is less).
Written change order (modifications): Issues can arise during home improvement projects. It is not uncommon for homeowners to request modifications. Any changes to the original contract must be documented with a written change order.

Note: The above listed requirements for residential remodeling and renovation projects in California apply to all home improvement projects valued at $500 or more.

Contact Our Bay Area Business Law Attorney Today

Lynnette Ariathurai is a business law attorney with extensive experience drafting and reviewing contracts. If you have any questions about a construction contract for a home improvement project, we are here as a resource. Contact us today for a fully confidential consultation. From our Fremont law office, our firm represents contracts throughout the Bay Area.

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Buying a Medical Practice in California? Know the Difference Between Purchasing the Business and Purchasing the Assets

The California Health Care Foundation reports that approximately 75,000 physicians are in active practice in our state. Are you a doctor who is considering buying a group medical practice? It is crucial that you ensure the transaction is structured properly. You could buy the entire business or, potentially, you could purchase its assets. Here, our California business law attorney explains the key points to understand about the differences between purchasing the company and purchasing the company’s assets.

What Does it Mean to Purchase a Business?

Purchasing a business means acquiring the entire company, including all its assets, liabilities, and operational responsibilities. As the buyer, you effectively step into the shoes of the previous owner. You get the medical practice and its existing contracts, but you also take on its debts, and legal obligations. Comprehensive due diligence is especially important when buying an entire medical practice.

What Does it Mean to Purchase the Assets of a Business?

Purchasing the assets of a business involves buying specific assets without acquiring the company itself. In an asset purchase, you select which assets to acquire—such as medical equipment, patient relationships, and intellectual property—while generally avoiding the company’s liabilities. However, you cannot assume the company’s contracts or the goodwill it has built.

Choosing the Best Option for Buying a Medical Practice in California

Pros of Buying a Business

Seamless transition: Acquiring the entire business allows for uninterrupted operations, minimizing disruptions for patients and staff.
Retention of contracts: Existing agreements—such as insurance provider contracts and leases—run with the business itself.
Established reputation: Goodwill matters. You inherit the practice’s brand identity and patient goodwill.

Cons of Buying a Business

Assumption of liabilities: You take on all the business’s debts and legal obligations, including any undisclosed or contingent liabilities.
Complex due diligence: Thorough investigation is required to uncover financial, legal, and regulatory issues, which can be time-consuming and costly.
Regulatory compliance challenges: Navigating California’s healthcare regulations for ownership transfer can be complex.

Pros of Buying the Assets of a Business

Selective acquisition: You can choose specific assets to purchase, allowing you to exclude unwanted equipment or obligations.
Reduce liability risk: As a rule, you can avoid assuming the seller’s liabilities, reducing your exposure to potential legal and financial risks.

Cons of Buying the Assets of a Business

Operational disruption: Transferring assets may necessitate re-establishing contracts, obtaining new licenses, and renegotiating insurance provider agreements.
Patient continuity concerns: You may face major challenges in retaining patients, as transferring medical records requires patient consent under privacy laws.

Speak to Our California Business Lawyer Today

Lynnette Ariathurai is a business attorney with extensive experience working with owners of medical practices. If you are considering buying a medical practice, we are here to help. Call us now or contact us online to arrange your confidential, no obligation consultation. From our Fremont office, our firm works with medical practices throughout the Bay Area.

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What to Know About the Upcoming BOIR Federal Filing Deadline in California

On January 1st, 2021, the Corporate Transparency Act was signed into law. The law official took effect on January 1st, 2024. Notably, it requires existing entities—companies that existed prior to 2024—to file their initial BOIR (Beneficial Ownership Information Report) by January 1st, 2025. An important deadline is approaching. It is crucial that business owners in California are prepared. In this article, our California business lawyer provides a comprehensive overview of the key things to know about the upcoming BOIR federal filing deadlines.

What is a BOIR Filing?

As explained by the Financial Crimes Enforcement Network (FinCEN), a Beneficial Ownership Information Report (BOIR) is a filing mandated by new federal law (the Corporate Transparency Act.) It requires certain corporations, limited liability companies (LLCs), and similar entities to disclose information about individuals who directly or indirectly own or control them. The report includes details such as the beneficial owner’s name, date of birth, address, and identification number from an acceptable document like a driver’s license or passport. The initiative aims to enhance transparency and combat illicit financial activities by preventing the misuse of shell companies.

Access to the form: Beneficial Ownership Information Report (BOIR)

Who Needs to File and Why?

The new rule requires entities that file articles of incorporation or articles of organization—or the equivalent—with any state secretary of state to register beneficial ownership information with FinCEN. A “beneficial owner” is defined as anyone who owns 25 percent or more of the company or has significant control as a decision-maker. Documentation needs vary:

U.S. citizens/green card holders: State-issued driver’s license or U.S. passport.
Foreign citizens: Valid documentation from their home country.
Entity owners: Appropriate ownership documentation for each company.

Know the Filing Deadlines and the Penalties

The deadlines for compliance depend on when your entity was formed:

Entities created before December 31, 2023: Must file by December 31, 2024.
Entities formed on or after January 1, 2024: Must file within 90 days of formation.
Entities formed on or after January 1, 2025: Must file within 30 days of formation.

What are the penalties for a BOIR violation? Noncompliance carries steep financial sanctions: $500 per day. You can avoid these fines with a timely, accurate filing.

We Handle BOIR Compliance for Companies in California

Navigating these requirements can be complex—especially since BOIR requirements are new to business owners. You do not have to handle the filing on your own. Lynnette Ariathurai can help. Attorney Ariathurai will ensure your compliance with federal law. Among other things, this includes determining whether your entity qualifies for an exemption, clarifying beneficial ownership criteria, and submitting an accurate, properly supported BOIR filing for your business entity.

Get Help From Our California Business Law Attorney Today

Lynnette Ariathurai is a top business attorney. If you have any questions about the BOIR federal filing requirements, we are here to help. Call us now or contact us online for a confidential consultation. With an office in Fremont, our firm represents businesses throughout the Bay Area.

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Discrimination Policy Lawyer for Business

We Draft and Review Anti-Discrimination Policies for Businesses in California

Lynnette Ariathurai is an experienced discrimination policy attorney for businesses in California. As of 2016, all companies and organizations with five or more employees are required to draft and distribute a legally compliant anti-discrimination policy. The right discrimination policy can help to prevent claims and reduce your risk of liability if an issue does arise. Contact us at our Fremont law office today for a confidential consultation with a California discrimination policy lawyer.

Know the Law: California has Strong Anti-Discrimination Provisions

California has strict anti-discrimination requirements for businesses. As explained by the California Civil Rights Department, our state’s Fair Employment and Housing Act (FEHA) applies to businesses and organizations with five or more employees. The law in California prohibits discriminatory practices in the workplace based on several different protected characteristics, including:

Race
Color
National origin
Sex
Gender
Sexual orientation
Gender identity
Age (40 plus)
Disability status
Medical conditions
Pregnancy status

Note: FEHA prohibits employers from retaliating against a worker who raises a complaint of discrimination. Any complaint must be taken seriously by employers—even if not well-supported.

Employers Must Distribute Written Anti-Discrimination Policy

In 2016, California changed its workplace regulations. Employers that are covered by FEHA—those with five or more employees, including part-time workers—must write and distribute a legally compliant anti-discrimination policy that meets the requirements of 2 CCR §11023. The policy should clearly confirm an employer’s commitment to preventing discrimination, harassment, and retaliation. Among other things, a written workplace anti-discrimination policy should highlight the law and provide basic complaint procedures for affected employees.

Your Anti-Discrimination Policy Should Be Drafted by a Lawyer

No employer wants to face liability from a discrimination claim. Indeed, preventing discrimination complaints from employees is highly desirable. The right (written) anti-discrimination policy can make a big difference. Professional expertise is a must. Employers should consult with an employment lawyer who can ensure that the policy is properly drafted and that it complies with all the requirements of FEHA and other laws/regulations in California. Your attorney can also tailor the policy to the specific needs of your business or organization.

How to Handle an Employee’s Discrimination Complaint (Be Proactive)

Even the best anti-discrimination policy cannot guarantee that no employee complaint will ever arise. Employers need to be ready to accept a complaint, independently investigate the allegations, and develop a defense strategy. There is no one-size-fits-all response to a worker’s discrimination complaint and/or harassment complaint. While these cases are generally best resolved before a lawsuit is filed, employers need to be prepared to fight aggressively to protect their interests.

Contact Our California Business Lawyer for Help with an Anti-Discrimination Policy

Lynnette Ariathurai is a business law attorney who helps companies prevent and resolve discrimination complaints. If you have any questions about writing an anti-discrimination policy, we are here to help. Contact us today for your confidential initial consultation. With an office in Fremont, we help businesses draft discrimination policies throughout the Bay Area including San Jose, San Mateo, Hayward, and Newark.

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Considerations When Buying a Veterinarian Practice

Are you considering purchasing a veterinary practice in California? Whether you are looking to take over that practice or you are interested in merging with an existing veterinary practice, it is crucial that you take a proactive approach. Lynnette Ariathurai is committed to providing solutions-focused business law services to veterinarians. Here, our Fremont business lawyer for veterinarians highlights considerations to keep in mind when buying a practice in California.

Know How to Structure the Purchase Agreement

One of the first considerations when buying a veterinary practice in California is determining how to structure the business. Broadly speaking, buyers and sellers have two main options available:

Stock purchase: A stock sale involves buying the seller’s shares, resulting in the full and outright ownership of the entire business—including both its assets and liabilities.
Asset purchase: An asset sale involves buying individual assets of the practice, such as equipment or client lists. It does involve buying the entire professional practice.

Put a Strong Emphasis on Due Diligence

Before purchasing a veterinarian practice in California, it is crucial that you conduct thorough due diligence. Due diligence is the comprehensive appraisal of a business undertaken by a prospective buyer to evaluate its assets, liabilities, and commercial potential. Some key issues that should be addressed during the due diligence process include:

Location: An office lease for veterinarians is a very important issue. You should evaluate the practice’s location to determine its potential for growth and accessibility.
Licensure: Veterinary practice is highly regulated. You should have a full understanding of the requirements of theCalifornia Veterinary Medicine Practice Act.
Liabilities: You need to know what are the taxes owed, what existing contracts are in place, and any potential claims against the practice—from an employee or otherwise after closing.
Equipment: What type of equipment comes with the practice? Be sure to inspect the condition and value of the equipment to ensure it meets modern veterinary standards.
Employees: Human capital matters. Potential buyers should review employee contracts and qualifications to understand the team’s stability and expertise.
Clients: Finally, you should assess the vet’s client base to gauge loyalty, satisfaction, and the potential for future business growth.

Prepare for Operating a Veterinary Practice

Acquiring a vet practice in California is a complicated endeavor. Setting yourself up for success goes beyond the purchase agreement and due diligence. Prospective vet practice owners should be ready to manage legal requirements, operational logistics, and client relations. Some key considerations to prepare for the operation of a veterinary practice include:

The Transfer of an existing license in compliance with the California Veterinary Medicine Practice Act;
The Transfer of key vendor, customer, leases and other contracts necessary to operate the practice;
A decision on which employees to retain, including their compensation and benefits; and
A timely notice to clients and their consent to transfer of pet medical records in compliance with all applicable laws and regulations in California.

By addressing these key areas and other legal matters, you will lay the groundwork for a strong transition. Proactively managing licensing, contracts, and personnel matters help to ensure operational continuity. Beyond that, clear communication with clients about changes can help you keep them satisfied with the business. An attorney can help you prepare for operations.

Get Help from Our California Business Attorney for Veterinary Practices Today

Lynnette Ariathurai is a business lawyer with extensive experience working with veterinarians. If you have any questions about the process for buying a veterinary practice, we are here to help. Call us now or contact us online to arrange your strictly confidential consultation. From our Fremont office, we provide business services to veterinary practices throughout the Bay Area.

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Legal Needs in Setting Up a Successful Nursing Company in California

Nursing is one of the most high-demand professions in the Bay Area. CalMatters estimates that there is currently a shortage of 36,000 nurses in our state—and that number is growing. If you are considering setting up your own nursing company in California to help address the need, it is imperative that you have the right structure in place. Here, our Fremont business law attorney discusses your legal needs when setting up a successful nursing company in California.

A California Nursing Business Needs a Strong Legal Foundation

Nurses are licensed, regulated professionals and a nursing company must be established with the proper legal structure. Notably, in California you cannot form a nursing business as a limited liability company (LLC), a partnership, or a corporation. Instead, you must form a Nursing Professional Corporation. You may hear this referred to as a PC.

A PC for nursing is a specialized type of entity that allows registered nurses (RNs) to provide their professional services through a corporation structure. It offers some key advantages, including liability protection and the ability to elect to be taxed as an S-corporation (pass-through taxation). Several types of medical professionals may own a stake in a nursing business in California. However, licensed nurses must always have a minimum 51 percent total ownership share.

Requirements to Form a Professional Nursing Corporation in California

A group nursing business will generally be set up as a PC in California. There are specific legal requirements that must be met to form a valid professional nursing corporation. More specifically, you and any co-owners in the nursing company must be sure to do the following:

Select a name (which must include “nursing”)
Draft and file articles of incorporation
Develop corporate bylaws for the PC
Register the PC with the Nursing Board

Developing the Right Strategy for a Successful Business in the Nursing Field

Meeting the basic legal requirements to set up a PC for a nursing company in California is certainly not sufficient to build a successful business. You need a comprehensive strategy. Here are other important legal/business issues that must be addressed when forming a nursing PC:

Ensure that you and any partners have the right ownership structure in place
Develop a compensation plan for your nursing PC
Secure and Employer Identification Number (EIN) from the IRS
Obtain adequate professional liability insurance coverage
Consider what types of contracts your PC will need to draft/enter
Proactively comply with all regulations from the California Board of Registered Nursing
Consider tax implications (may be taxed as S-corporation or C-corporation)

Contact Our Bay Area Business Attorney for Nursing Companies Today

Lynnette Ariathurai is a business lawyer with more than three decades of experience. If you have any questions about the legal needs of a nursing company in California, we are here as a resource. Call us now or contact us online for your confidential initial appointment. With an office in Fremont, we provide business law services to nursing companies throughout the Bay Area.

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