California ownership & cpom for med spas

Ownership & corporate practice of medicine in California

California strongly bars the corporate practice of medicine. This is the opposite of a permissive-ownership state.

• Corporations and other artificial legal entities have no professional rights, privileges, or powers — laypersons and lay entities may not own any part of a medical practice or control clinical decisions.

  Cal. Bus. & Prof. Code §2400 · verified Jul 26, 2026

• The compliant structure is a professional medical corporation under the Moscone-Knox Act: a majority of shares must be held by California-licensed physicians, only enumerated licensed health professionals may hold shares (up to 49% in aggregate), and no lay person may hold any stock.

  Cal. Corp. Code §13401.5(a) · verified Jul 26, 2026

• A lay-owned management services organization (MSO) may provide administrative/back-office services by contract, but may not control medical records, clinical hiring/firing, coding/billing, or the selection of medical equipment or drugs — doing so is illegal corporate practice of medicine.

  Medical Board of California — Medical Spas guidance · verified Jul 26, 2026

• Effective Jan 1, 2026, SB 351 bars a private-equity group or hedge fund from controlling or interfering with a practice’s professional judgment (diagnostics, referrals, treatment, coding/billing, clinical staffing, equipment), voids certain non-compete and non-disparagement clauses, and empowers the Attorney General to enforce.

  Cal. SB 351 (2025), Health & Safety Code §§1190–1192 · verified Jul 26, 2026