Corporations – Professional Corporation – California

California Corporations Code
California Business and Professions Code

General Discussion:

A California professional corporation organized to engage in the practice of veterinary medicine is controlled generally by all of the provisions of the California Corporations Code and specifically by the provisions of §§ 13400-13410 (Professional Corporations) of that Code. Additionally, the corporation is subject to the statutory requirements of §4800 through §34917 of the Business and Professions Code.

In addition to the above named statutory requirements, a professional corporation organized to engage in the practice of veterinary medicine is subject to the rules and regulations of the California Veterinary Medical Board.

A professional corporation organized to engage in the practice of veterinary medicine is formed by the filing of Articles of Incorporation with the Secretary of State.

The following are applicable to a professional corporation organized to engage in the practice of veterinary medicine are:

1. The name of a professional corporation organized to engage in the practice of veterinary medicine must contain the words “veterinary corporation” or words or abbreviations which denote its corporate existence. A professional corporation may adopt any name permitted by a law expressly applicable to veterinary medicine or by a rule or regulation of the Veterinary Medical Board.

2. Each director, shareholder, and officer of a professional corporation organized to engage in the practice of veterinary medicine MUST be a veterinarian licensed to practice in the State of California.

3. However, if a professional corporation organized to engage in the practice of veterinary medicine has only one shareholder (who must be licensed to practice veterinary medicine), then it is required to have only one director. The sole shareholder shall be the President and the Treasurer of the corporation. The other officers need not be licensed.

4. If a professional corporation organized to engage in the practice of veterinary medicine has only two shareholders, then it is required to have only two directors. The two shareholders shall, between them, hold the offices of President, Vice-President, Secretary, and Treasurer.

5. A professional corporation organized to engage in the practice of veterinary medicine may render professional services only through employees who are licensed to render the professional services of a professional optometrist.

6. Shares of stock in a professional corporation organized to engage in the practice of veterinary medicine may be issued only to a person who is licensed to practice veterinary medicine. Any shares issued in violation of this restriction are void.

7. Shares in a professional corporation organized to engage in the practice of veterinary medicine may be transferred only to a person who is licensed to engage in the practice of veterinary medicine, to a shareholder of the corporation, or to the professional corporation itself. Any transfer in violation of this restriction is void.

8. The income of a professional corporation organized to engage in the practice of veterinary medicine attributable to professional services rendered while a shareholder is a disqualified may not in any manner accrue to the benefit of that shareholder for his shares in the corporation.

9. No shareholder of a professional corporation organized to engage in the practice of veterinary medicine may enter into a voting trust, proxy, or any other arrangement vesting another person (other than another person who is a shareholder of the same corporation) with the authority to exercise the voting power of any or all of his or her shares. Any such purported voting trust, proxy or other arrangement is be void.

10. If a professional corporation organized to engage in the practice of veterinary medicine fails to acquire all of the shares of a shareholder who is disqualified or of a deceased shareholder, or if a disqualified shareholder or the representative of such a deceased shareholder fails to transfer the subject shares to the corporation, to another shareholder of the corporation, to a person licensed to practice veterinary medicine in California within 90 days following the date of disqualification, or within six months following the date of death of a deceased shareholder, then the certificate of registration of the corporation may be suspended or revoked by the Veterinary Medical Board. In the event of a suspension or revocation, the corporation must immediately cease to render professional services in California.

11. A professional corporation organized to engage in the practice of veterinary medicine is subject to the applicable rules and regulations adopted by the Veterinary Medical Board and all the disciplinary provisions of the Business and Professions Code expressly governing the practice of veterinary medicine. Statutory provisions do not affect or impair the disciplinary powers of the Veterinary Medical Board over persons licensed to practice veterinary medicine or any other law, rule or regulation pertaining to the standards for professional conduct of licensed persons or to the professional relationship between any licensed person furnishing professional services and the person receiving such services.

12. A professional corporation organized to engage in the practice of veterinary medicine may not do or fail to do any act the doing of which or the failure to do which would constitute unprofessional conduct under any statute, rule or regulation now or hereafter in effect.

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