California: Ownership and Oversight
Strict CPOM (Moscone-Knox). California runs one ownership rule per professional corporation type, and a separate oversight rule per license type. Answer the entity question and the supervision question separately — getting one right never answers the other.
Who the statute actually covers
- "Licensed person" (Corp. Code § 13401(c)): a natural person licensed under the Business & Professions Code, the Chiropractic Act, or the Osteopathic Act to render the same professional services as the corporation.
- Medical corporation shareholders: "physicians and surgeons" means MDs licensed under the Medical Practice Act and DOs licensed under the Osteopathic Act. Chiropractors are not physicians here; they appear only in the § 13401.5(a) minority list.
- PA corporation minority list (§ 13401.5(i)): physicians and surgeons, RNs, acupuncturists, naturopathic doctors, licensed midwives. This list is narrower than the medical corporation's minority list.
1. Who can own what
| Entity / Path | Who may own | Key limits |
|---|---|---|
| Professional Medical Corporation | Physicians (MD/DO) at least 51%. § 13401.5(a) licensees (psychologists, RNs, optometrists, LMFTs, LCSWs, PAs, chiropractors, acupuncturists, NDs, LPCCs, PTs, pharmacists, midwives, OTs) may hold minority shares. | Non-physician shares capped at 49% combined; non-physician shareholders may not outnumber physicians. |
| Physician Assistant Corporation | PAs may own up to 100%. § 13401.5(i) licensees may hold minority shares (49% cap; may not outnumber PA shareholders). May employ any Division 2 licensee, including physicians. | Renders PA services. Every PA in the entity still practices under a practice agreement with a physician; ownership never waives it. |
| Nursing Corporation | RNs hold the majority; § 13401.5(f) licensees may hold minority shares. | AB 890 (103/104 NP status) changes scope of practice, not the ownership rule. |
| Lay / MSO | No unlicensed ownership, voting proxies, or control of any professional corporation. | MSO supports the PC via FMV MSA; 2026 amendments restrict captive-PC succession and stock-transfer controls. |
2. Collaborative and supervisory oversight
| Role | Agreement required | Oversight mechanics | Path to independence |
|---|---|---|---|
| PA | Practice agreement with a physician (B&P § 3502.3; SB 697 replaced the delegation of services agreement). | A physician may supervise a maximum of 8 PAs at any one time (B&P § 3516, as amended by AB 1501, effective Jan. 1, 2026; the prior cap was 4). No statutory chart-review percentage; review and co-signature mechanics are set in the practice agreement. Physician availability by phone/electronic means satisfies supervision. | None. CA has no PA independence pathway; the practice agreement is permanent regardless of experience or ownership. |
| NP | Standardized procedures developed and approved with a physician (B&P §§ 2834–2837) unless the NP holds AB 890 status. | A physician may supervise a maximum of 4 NPs furnishing drugs or devices at one time (B&P § 2836.1(e)). Mechanics otherwise defined by the standardized procedures. | AB 890 two-step: 103 NP (§ 2837.103) practices without standardized procedures in qualifying group settings after 3 FTE years or 4,600 hours; 104 NP (§ 2837.104) practices independently outside those settings after 3 additional years as a 103 NP. |
3. Primary authorities
- Cal. Corp. Code §§ 13400–13410 (Moscone-Knox); § 13401.5 (per-entity shareholder lists and 49% caps).
- Cal. B&P Code §§ 3502, 3502.3, 3516 (PA practice agreements and supervision limits; SB 697, 2019; AB 1501, 2025).
- Cal. B&P Code §§ 2834–2837.104 (NP standardized procedures; AB 890 103/104 pathway).
- Cal. B&P Code § 2408; 2026 MSO/captive-PC amendments.
Myth-buster: "PAs can own 100% in California" is true only for a Physician Assistant Corporation, never a Professional Medical Corporation — and the 100% PA owner still needs a practice agreement for every PA in the building, including herself. Ownership lives in the Corporations Code; supervision lives in the B&P Code. Two different books, two different questions.
General education, not legal advice. Verify current statutes, board rules, and opinions before relying on this summary.