10 Sep CAN AN ACUPUNCTURIST IN CALIFORNIA ORGANIZE AS A LIMITED LIABILITY COMPANY?
I believe the answer is no. I met an acupuncturist in Venice Beach who had just started her practice. She wanted to know if she should organize her business as a limited liability company or as a corporation. Cal. Corp. Code 17375 prohibits a limited liability company from offering professional services as that is defined in Cal. Corp. Code 13401. However, that would include all of the numerous professions that are governed by the California Business and Professions Code. As a result, the California Secretary of State requested an opinion from the Office of the Attorney General of California on the matter, which ultimately clarified what constituted professional service for purposes of determining whether such services were prohibited from being offered by a limited liability company. The opinion distinguishes between what it calls occupational activities that require a license (for example, barbers, locksmiths and pest control operators) and learned professions (for example doctors, architects and chiropractors). It concludes that businesses that fit into the first category of occupational activities can form a limited liability company to provide those services but the other professionals may form corporations under the Moscone-Knox Professional Corporation Act. Since the opinion does not directly address whether an acupuncturist fits into the category of an occupational activity or that of a learned profession, I reviewed the website of the Acupuncture Board. Although silent on the issue of whether an acupuncturist may form a limited liability company, the Board issued regulations requiring that a corporation providing acupuncture services be a professional corporation. It appears that a person wanting a corporate form with which to organize their acupuncture practice should form a professional corporation instead of a limited liability company.