Who Can Own a Med Spa in California? 2026 CPOM Rules

Most guides to California med spa ownership stop at "you need a PC and a physician." True, and nowhere near enough to structure a business on. The questions that decide whether a deal closes or a practice survives a complaint are more specific: which license types may hold shares, what percentage, how many of them, what the management company may and may not decide, how its fee may be calculated, and what happens to the money and the contracts if a regulator concludes the structure was never lawful.

This guide works through those questions using California's own statutes — Business and Professions Code sections 2400, 2052 and 650, the Moscone-Knox Professional Corporation Act, AB 890's nurse practitioner provisions, and SB 351, effective January 1, 2026. It describes the rules rather than advising on your situation. Structuring decisions here are fact-specific and expensive to unwind, so treat what follows as preparation for a conversation with a California healthcare attorney rather than a substitute for one.

California's Corporate Practice of Medicine Doctrine, and Why It Is Stricter

The corporate practice of medicine doctrine — CPOM — is the rule that medicine is practiced by licensed people, not by companies. California enforces it more aggressively than most states, and it does so from several statutory footholds at once rather than from one tidy med spa statute.

Business and Professions Code Section 2400

The core provision is short. Section 2400 states that "corporations and other artificial entities shall have no professional rights, privileges, or powers." The Medical Board of California reads that as preventing unlicensed persons from interfering with or influencing a physician's professional judgment, and it is the reason an ordinary company cannot own a medical practice, employ physicians to practice medicine, or bill for physician services. Note what the section does not say: it does not list forbidden business models. It withholds professional capacity from entities altogether, which is why the analysis always starts with what kind of entity is delivering care.

Business and Professions Code Section 2052 and the Criminal Floor

Section 2052 makes practicing or attempting to practice medicine, or holding oneself out as practicing medicine, without a valid and unrevoked certificate a public offence. This is the enforcement floor underneath CPOM. When a lay-owned entity delivers medical treatments, the theory is not merely that the corporate form is irregular — it is that someone unlicensed is practicing medicine. That converts a structuring error into potential criminal exposure, and it is why California healthcare lawyers treat entity choice as a licensing question rather than a tax question.

The Moscone-Knox Professional Corporation Act

Because entities have no professional powers under section 2400, California needed a statutory exception to let physicians incorporate at all. That exception is the Moscone-Knox Professional Corporation Act, at Corporations Code section 13400 and following. Moscone-Knox creates the professional corporation as a distinct animal: a corporation organized to render professional services, whose shareholders must generally be licensed, and whose eligibility rules are set profession by profession. Every compliant California med spa ownership structure is ultimately an exercise in fitting inside Moscone-Knox.

What SB 351 Added on January 1, 2026

SB 351 was signed on October 6, 2025 and took effect on January 1, 2026. It largely codifies what the Medical Board had already been saying, and aims squarely at management structures. The law bars private equity groups and hedge funds doing business in California from interfering with the professional judgment of physicians and dentists, naming decisions that must stay clinical: which diagnostic tests are appropriate, whether a referral is needed, responsibility for overall patient care, and how many patients a clinician sees. It also voids non-compete and non-disparagement clauses tied to practice management arrangements, reaches contracts already in force, and gives the Attorney General injunctive relief and attorney's fees. A management agreement that was merely aggressive in 2025 may contain provisions that are simply void in 2026.

Why This Bites Harder Than in Other States

Some states permit a general corporation or an LLC to own a medical practice, or permit lay ownership so long as a licensed medical director supervises care. California does neither: the entity itself must be eligible, and eligibility is a closed list. Hiring a good medical director does not cure a bad entity — the director is a governance requirement layered on a lawful structure, not an alternative to one. Enforcement is also distributed: the Medical Board against physician licensees, the Board of Registered Nursing against nurse and NP licensees, district attorneys under section 2052, the Attorney General under SB 351, and competitors under the Unfair Competition Law at section 17200. Nobody approves your structure up front, which is easily mistaken for nobody checking.

Ownership Rules Interact With Scope Rules

California also polices who may perform which treatment, and the two questions compound. An owner may be eligible to hold the entity and still unable to staff the treatment menu they planned, or hold the right license for the treatments but the wrong entity for the business. Our guide to who can inject Botox in California covers the delegation side; this guide covers the equity side. A structure is only sound when both hold.

Who Can Own a California Med Spa: the Short Version

The table below summarizes the equity position of each candidate owner. "Clinical entity" means the professional corporation that employs clinicians, owns the medical records and delivers treatment.

The California Medical Corporation: Who May Hold Shares

This is where the real detail lives, and where generic advice fails. A California medical corporation is not simply "a PC owned by a doctor." Its shareholder register must satisfy three separate constraints at once, and a cap table satisfying two of them is still non-compliant.

The 51% Physician Floor

Licensed physicians must hold at least 51% of the issued and outstanding shares of a medical corporation. The phrasing matters: it applies to shares actually issued and outstanding, not to authorized shares. So an option pool or convertible instrument that would dilute physicians below 51% on conversion is a latent compliance failure rather than a problem for later, and buybacks can breach the floor without anyone selling anything, simply by changing the denominator.

The 49% Bucket and Which Licenses Qualify

Corporations Code section 13401.5 is the provision that makes multi-disciplinary med spas possible. It permits named non-physician licensees to be shareholders, officers, directors or professional employees of a medical corporation, provided their shares together do not exceed 49%. The list for medical corporations includes doctors of podiatric medicine, psychologists, registered nurses, optometrists, marriage and family therapists, licensed clinical social workers, physician assistants, chiropractors, acupuncturists, naturopathic doctors, licensed professional clinical counselors, physical therapists, pharmacists, licensed midwives and occupational therapists.

Read that list for what it excludes as much as what it includes. Nurse practitioners appear only by virtue of being registered nurses, which puts them in the minority bucket rather than the controlling one. Estheticians, cosmetologists, laser technicians, practice administrators and finance partners appear nowhere, so they cannot hold a single share of the clinical entity. Because the statute is amended as professions are added, check the current text at Corporations Code section 13401.5 on leginfo before issuing shares.

The Shareholder Head-Count Rule Everyone Misses

Section 13401.5 imposes a second, independent limit: the number of non-physician licensee shareholders may not exceed the number of shareholders licensed by the board that regulates the corporation. In a medical corporation, that means the count of eligible non-physician shareholders may not exceed the count of physician shareholders.

This trips up well-intentioned structures. One physician holding 60% alongside three nurse practitioners holding 40% between them passes the percentage test and still breaches the head-count test, because three non-physician shareholders exceed one physician shareholder. The fix is fewer non-physician shareholders or more physician shareholders — designed in, not discovered during diligence.

Officers, Directors and the Practical Governance Layer

Eligibility reaches past the share register into board and officer positions. Under Moscone-Knox, directors and officers of a professional corporation must generally be licensed persons, with narrow allowances for an assistant secretary and assistant treasurer. An unlicensed spouse or business partner cannot be appointed a director to secure influence the share rules deny them — and pursuing the same effect through voting agreements or irrevocable proxies invites the argument that control was transferred in substance.

What Happens on Death, Disqualification or License Loss

Shares cannot sit indefinitely with someone ineligible to hold them. Moscone-Knox contemplates that where a shareholder dies or becomes legally disqualified, their shares must be acquired by the corporation or by eligible persons within a defined period. For a med spa with one physician owner this is no formality: if that license is suspended, the corporation can lose its qualifying ownership overnight. Bylaws and a shareholder agreement should already answer who buys the shares, at what valuation, on what timetable, and who steps in clinically meanwhile.

Forming and Maintaining a California Medical Corporation

The mechanics are less onerous than the eligibility analysis, but two points below are frequently reported incorrectly, including in guidance aimed at med spa owners themselves.

Filing With the Secretary of State

A California professional medical corporation is formed by filing Articles of Incorporation for a professional corporation with the Secretary of State. The articles identify the corporation's professional purpose, and initial directors must be eligible licensed persons. Standard processing runs a few weeks, with expedited handling available for a fee. Naming rules also apply: be cautious about facility-style names implying a licensed facility you do not hold.

There Is No Medical Board Registration for a Medical Corporation

This is the correction worth flagging clearly, because it appears widely online and previously appeared on this page. Under Moscone-Knox, professional corporations generally need a certificate of registration from the board that regulates the profession — but Corporations Code section 13401(b) expressly provides that a professional corporation rendering professional services through persons licensed by the Medical Board of California, or by an examining committee under the Board's jurisdiction, is not required to obtain a certificate of registration in order to render those services.

There is likewise no med spa license or facility registration issued by the Medical Board, so claims that you must wait four to eight weeks for Board approval before opening do not reflect California law. What is real is that the Board regulates the licensees inside your business and publishes guidance on med spa arrangements — see its medical spas resource page — and that separate accreditation obligations can attach to outpatient settings using deeper sedation or anesthesia. Those are different requirements from a med spa registration, which does not exist.

Ordinary Licenses and Continuing Eligibility

What a California med spa does need is unglamorous: a city or county business license in each operating municipality, a fictitious business name filing if it trades under anything other than its legal name, a seller's permit if it retails taxable products, an EIN and payroll registrations, and professional liability cover matching the treatment menu. Keep the corporation's banking genuinely separate, because commingled accounts undermine any later argument that the professional corporation was a real, independently capitalized business. Eligibility is also a continuing condition rather than a formation event: a departing shareholder, a new investor or a physician moving out of state can quietly break the 51% floor, the 49% cap or the head-count rule.

What a Non-Physician May and May Not Own or Control

Two things get conflated here: holding equity, and exercising control. California restricts both by different mechanisms, and a structure can pass on equity while failing on control.

Rules differ sharply from one state to the next; for the national comparison, see our guide to who can own a med spa by state.

The Equity Question

On equity the rule is mechanical. If your license appears in the section 13401.5 list, you may hold up to 49% of a medical corporation subject to the head-count rule. If it does not — or you hold no clinical license at all — you may hold nothing in the clinical entity: not a nominal share, not a non-voting class, not an economic interest dressed as a profits interest. The MSO is then your only equity route.

The Control Question

Control is judged in substance. Decisions that must sit with the licensed practice include which patients are accepted and treated, what treatment is appropriate, whether a referral or further workup is needed, what the protocols say, who is hired and fired clinically, how many patients a clinician sees, the setting and equipment used, and ownership of and access to the records. SB 351 now names several of these expressly for private equity groups and hedge funds, making them a useful checklist for any management arrangement.

Where Minority Licensee Owners Get Stuck

A 40% nurse practitioner shareholder is a real owner with real economics who still cannot outvote the physician majority on clinical governance. That is by design, and worth confronting before the money moves. The workable answer is a shareholder agreement giving the minority genuine protection on business matters — distributions, transfer rights, a buy-sell mechanism, reserved matters on debt and new locations — while leaving clinical authority unambiguously with the majority. Protective rights over business decisions are ordinary corporate practice; protective rights over clinical decisions are what CPOM exists to prevent.

Can a Nurse Practitioner Own a Med Spa in California?

This is the question that has changed most, and the one most often overstated. AB 890 genuinely opened a path to independent NP ownership. It did not repeal CPOM, nor make a nurse practitioner a physician for entity purposes.

What AB 890 Actually Created

AB 890 added two designations to the Business and Professions Code. A 103 NP, under section 2837.103, may practice without standardized procedures — the physician-approved written protocols that traditionally define NP practice in California — but only in a defined setting where one or more physicians also practice. A 104 NP, under section 2837.104, may practice independently, outside such a group setting. The Board of Registered Nursing publishes eligibility detail on its AB 890 page.

The Nursing Corporation Route

Because a nurse practitioner is a registered nurse rather than a physician, the entity that fits an independent NP-owned practice is generally a professional nursing corporation under Business and Professions Code section 2775 and following, not a medical corporation. Mirror-image shareholding rules apply: registered nurses must hold at least 51%, and listed non-nurse licensees — physicians among them — may together hold up to 49%. A nursing corporation may only render services within nursing scope, which is the constraint that decides whether it can carry your treatment menu.

What AB 890 Did Not Change

Three limits survive intact. Scope: a 104 NP must stay within the population focus of their national certification, so a psychiatric-mental-health NP does not acquire an aesthetics practice by obtaining 104 status. Entity eligibility: 104 status does not add nurse practitioners to the list of licensees who may control a medical corporation, nor permit a lay-owned entity to employ the NP to practice. Timing: the pathway requires roughly three years as a 103 NP first, so in 2026 the eligible population is small.

The Common NP Structuring Mistake

The pattern to avoid is an NP who forms an LLC, engages a physician as paid medical director, and treats that as ownership. The LLC is an ineligible entity, the director agreement does not supply what the entity lacks, and the NP has usually also created a fee arrangement resembling a lay entity profiting from medical services. Our guide Can a Nurse Practitioner Own a Med Spa in California? AB-890 Explained walks both pathways in more detail.

Can an RN, an Esthetician, or a Pure Investor Own One?

These three sit at different points on the spectrum, and lumping them together as "non-physicians" hides the differences that matter commercially.

The Registered Nurse

An RN who is not a nurse practitioner is an eligible minority shareholder of a medical corporation, up to 49% and subject to the head-count rule. An RN may also hold the controlling interest in a nursing corporation — but that entity can only deliver what registered nurses may lawfully deliver, and an RN cannot perform the good faith examination or issue the treatment order California requires before medical aesthetic treatment. An RN-controlled entity therefore needs a physician or qualifying NP for the diagnostic and ordering function, which pulls the structure back towards physician control.

The Esthetician or Laser Technician

An esthetician can own a licensed skincare business outright, and many successful California operators do exactly that, with a menu inside the scope regulated by the Board of Barbering and Cosmetology. What they cannot own is the clinical entity of a med spa offering medical treatments, because estheticians are not on the section 13401.5 list. Three routes remain: keep the business genuinely inside esthetician scope; own an MSO supporting a separately owned professional corporation; or partner with a physician holding the controlling interest, with a shareholder agreement protecting the esthetician's economics. Our guide to the California esthetician scope of practice sets out where that line falls treatment by treatment.

The Pure Investor

An investor with no clinical license cannot hold equity in the clinical entity in any form. Participation runs through the MSO, and the return must come from management fees for real services at fair market value rather than a share of clinical profit. Since January 1, 2026, a private equity group or hedge fund faces the additional SB 351 constraints on control, and any non-compete or non-disparagement clause tied to the arrangement is void. Sophisticated investors now price legal structure as a diligence item, because the downside is not a discount but an unenforceable contract.

MSO Structures: What a Compliant California Arrangement Looks Like

The MSO is the legitimate answer to a real problem: medicine must be owned by licensees, but capital, systems and management expertise often sit elsewhere. Done properly, an MSO is neither a loophole nor a fiction.

The Two-Entity Model

A compliant arrangement has two genuinely separate entities. The professional corporation, owned by eligible licensees, employs the clinical staff, owns the patient records, holds the clinical licenses and accounts, approves protocols and bears responsibility for care. The MSO, which non-physicians may own and which may be an LLC, supplies premises, equipment, systems and non-clinical staff under a written management services agreement. Both should be adequately capitalized, keep their own books, and behave like counterparties rather than departments.

What the Management Services Agreement May Cover

Legitimate MSO services include billing and collections for services the professional corporation rendered; payroll and human resources for non-clinical staff; marketing within the limits of California's professional advertising rules; premises, fixtures and equipment supplied by lease; IT, scheduling and records systems; procurement of non-clinical supplies; and bookkeeping and financial reporting. The agreement should be specific about deliverables, because a vague scope invites the inference that what is really being sold is control.

Pricing the Management Fee

The fee must reflect fair market value for services actually delivered. The conservative structure is a fixed fee, supported by a contemporaneous written valuation and revisited as the service mix changes. Percentage-of-revenue fees are common and not automatically unlawful, as the next section explains, but a percentage high enough to leave the professional corporation unable to fund its own clinical obligations is evidence that the practice is not genuinely independent.

Documentation That Makes the Structure Credible

Structures rarely fail on their diagrams; they fail on their records. A defensible file holds the management services agreement and any leases, the fair market value analysis behind the fee, board minutes showing the professional corporation making its own decisions, protocols bearing genuine clinical approval, clinical employment agreements signed by the professional corporation rather than the MSO, and evidence that invoices were raised and paid on the stated terms. If no invoices exist, the paperwork argues against you.

MSO Arrangements That Collapse Into Unlawful Control

These failure modes are well known to regulators and repeat with striking consistency. Each is a place where an arrangement that reads well can operate unlawfully.

The Captive Professional Corporation

A physician holds the shares nominally while the MSO holds an option or stock transfer restriction agreement letting it replace that physician at will, sometimes for nominal consideration. The equity is formally intact and economically hollow. This is the most aggressive feature of imported med spa structures, and once the transfer documents surface, the argument that control was transferred in substance is not hard to make.

The MSO That Staffs the Clinic

Clinical hiring, discipline and termination are clinical decisions. When injectors and nurses are employed by the MSO and seconded to the practice, or the MSO holds power to remove a clinician, the professional corporation no longer controls the people delivering care. Clinical staff should contract with the professional corporation; non-clinical staff can sit with the MSO.

Menu, Protocol and Throughput Control

Choosing which treatments to offer, approving protocols and setting patient volumes are clinical judgments, several named directly by SB 351. A management arrangement requiring MSO sign-off before the practice changes a protocol, or setting a per-clinician patient quota, asserts exactly the control the statute withholds.

Financial Suffocation

A structure can transfer control through money alone. A fee that sweeps essentially all revenue, an MSO controlling the bank accounts and paying the practice's obligations at its discretion, or a professional corporation with no working capital — each leaves the practice unable to act independently even where every clinical clause is drafted correctly. Regulators look at cash, not only contracts.

Provisions That Are Simply Void in 2026

Since January 1, 2026, non-compete and non-disparagement clauses tied to arrangements for managing a physician or dental practice are void under SB 351, and the law reaches contracts already in force. So legacy agreements need reviewing rather than assuming, and a clinician leaving an investor-backed California med spa may be far less constrained than their contract states. See SB 351 on leginfo.

Fee-Splitting and Kickback Exposure in Ownership and Management

Fee-splitting sits alongside CPOM rather than inside it, and a structure can be entity-compliant and still unlawful on payment terms. Business and Professions Code section 650 is the operative provision.

What Section 650 Prohibits

Section 650 prohibits offering, delivering, receiving or accepting consideration as compensation or inducement for referring patients, clients or customers. It is not limited to cash and does not require proof a patient was harmed. Violation is a wobbler, chargeable as a misdemeanor or felony, with fine exposure reported at up to $50,000 per violation and the prospect of imprisonment, on top of license discipline. Current text: Business and Professions Code section 650.

Percentage Management Fees and Epic Medical Management v. Paquette

The leading California guidance for MSOs is Epic Medical Management, LLC v. Paquette (2015). Considering a comprehensive management agreement compensated on a percentage of collections, the Court of Appeal observed that section 650 has flexibility and indicated such an arrangement would not necessarily violate the anti-kickback, fee-splitting or corporate practice prohibitions — noting no absolute bar on consideration paid to a management company even where it occasionally refers patients. The decision helps MSOs, and should be read narrowly: it turned on a comprehensive services arrangement rather than a bare referral fee, and does not license every percentage structure.

Where Med Spas Actually Get Caught

The recurring problems are smaller than the case law suggests. Paying injectors or front-desk staff a commission on treatments sold is the most common; a fixed hourly or salaried basis at fair market value is the conservative alternative. Paying influencers or referral agencies per patient delivered is a second. Revenue-share with a physician who supplies orders but little else is a third, and usually signals a supervision problem too. Voucher promotions that route a share of the treatment price to a marketing platform deserve specific legal review rather than an assumption that everyone does it.

The Medical Director's Role in an Ownership Structure

The medical director is where ownership structure meets daily clinical governance — and the role most often used to paper over a structural defect, which is precisely what it cannot do.

When the Owner Is the Medical Director

Usually the physician who controls the medical corporation also serves as medical director. Even then the role should be documented separately from ownership: duties, availability, protocol approval and review cadence, chart review sampling, delegation and supervision, adverse event handling, and any compensation for the role as distinct from distributions on shares. Separating the two makes the practice legible to a regulator and simplifies matters if the roles later split.

When a Contracted Physician Is the Medical Director

Where an eligible non-physician owner controls the entity, or where the physician owner does not practice in the aesthetic menu, a contracted medical director carries the clinical governance. The agreement then becomes the primary document defining the relationship, and it needs to describe a real job: identified duties, a defined time commitment, genuine authority over protocols and clinical staffing, fair market value compensation not tied to treatment volume or revenue, and a clear termination process. Our guide to California med spa medical director requirements covers the duties and documentation in detail.

The Ghost Medical Director Problem

A physician who appears on documents but approves no protocols, reviews no charts, visits no facility and is unknown to staff is a structural failure, not a paperwork gap. Investigators test this directly, by asking staff who the medical director is and comparing protocol signatures against the physician's actual knowledge of the practice. Section 2264 makes aiding or abetting unlicensed practice unprofessional conduct, which puts the absent physician's own license at issue alongside the business. California publishes no numerical cap on how many practices one physician may direct, and that absence is regularly misread as permission; the real test is whether the physician can actually perform the role at each site.

What Happens When the Structure Is Wrong

The phrase "CPOM violation" understates how the risk actually lands. Exposure arrives on several fronts at once, and it reaches the licensed professionals personally.

Licensing Board Discipline

The Medical Board, the Board of Registered Nursing and other healing arts boards can act against the licensees involved. Outcomes run from citation and fine through probation, suspension and revocation. Clinicians consistently underestimate this when lending a license to someone else's structure: the entity may be dissolved, but discipline attaches to the individual and follows them across employers and states.

Criminal exposure sits alongside it: unlicensed practice under section 2052 is a public offence and section 650 violations are wobblers. Prosecutions of med spa structures are not everyday events, but they exist, and the availability of criminal charges changes the negotiating posture in an investigation.

Unenforceable Contracts and Uncollectable Fees

This is the consequence investors care about most. Agreements built on an unlawful structure may be unenforceable as contrary to law, which cuts against whoever seeks to enforce them. An MSO that has performed for years can find it cannot sue to recover unpaid management fees, because the arrangement it is suing on is what a court will not enforce. Since January 1, 2026 specific provisions are void by statute rather than merely vulnerable.

Unwinding, Restitution and Attorney General Action

Remedies can be restorative rather than merely punitive. Under the Unfair Competition Law at section 17200, unlawful business practices can support injunctions and restitution, and SB 351 gives the Attorney General injunctive relief, other equitable remedies and recovery of fees and costs. In practice that can mean restructuring under supervision, giving back money derived from the arrangement, and paying the state's costs of fixing it.

The Commercial Consequence Nobody Budgets For

Even absent enforcement, a defective structure is a transaction killer. Buyers, lenders and insurers diligence CPOM compliance, and a captive professional corporation, an ineligible shareholder or an unsupported percentage fee will surface. The realistic outcomes are a broken deal, a reduced price, or an indemnity leaving the founder carrying historical risk personally. Retroactive fixes also mean transferring shares, renegotiating agreements and unpicking tax positions — far more expensive than forming the right entity at the outset.

A Decision Framework by Your License Status

Working from your own license is the fastest way to find the structures available to you.

If You Are a California-Licensed MD or DO

You have the widest set of options. Form a medical corporation, hold at least 51% yourself or with other physicians, and admit eligible licensees into the minority bucket if you want clinical partners — watching the head-count rule. Bring outside capital through an MSO with a fair market value fee, and document your medical director role separately from your shareholding. The main risks are dilution below the floor and taking on more directorships than you can genuinely perform.

If You Are a Qualifying 104 NP

You can own your practice. Confirm your designation with the Board of Registered Nursing in writing before incorporating, form a nursing corporation with registered nurses holding at least 51%, and scope the menu to your certification's population focus. Where the menu extends beyond nursing scope you need physician involvement, which usually means a medical corporation instead. Do not rely on 104 status to justify an LLC or a lay-owned entity.

If You Are a 103 NP, a Standard NP, or an RN

Independent ownership of the clinical entity is not available yet, and the honest question is whether to build now as a minority owner or wait — both are legitimate. As a minority owner you can hold up to 49% of a medical corporation with a shareholder agreement protecting your economics and exit. If the 104 pathway is the goal, the three-year clock runs from your 103 designation, so obtaining 103 status promptly is what matters. Our California nurse practitioner med spa playbook sets out the sequencing.

If You Are an Esthetician or Hold No Clinical License

Pick your lane deliberately. Either build a business that stays genuinely within esthetician scope and needs no medical entity at all, or accept that the clinical entity will be owned by someone else and structure your participation through a properly documented MSO with a defensible fee. The failure mode is trying to have both: a medical treatment menu with lay ownership, held together by a medical director agreement. That is the structure enforcement is looking for.

Setup Checklist for a Compliant California Structure

Use this as a working list to take into a conversation with counsel, not a substitute for it.

Entity and Ownership

• Confirm every intended shareholder's license type against the current section 13401.5 list, and verify license status directly with the issuing board
• Model the cap table against all three constraints: physicians at or above 51%, other licensees at or below 49% collectively, and the non-physician shareholder count not exceeding the physician count
• Check the fully diluted position, including options and convertible instruments, not just shares issued today
• Choose the right professional corporation — medical where physician-controlled, nursing where NP or RN-controlled — and confirm the treatment menu fits that entity's scope
• File Articles of Incorporation for a professional corporation with the Secretary of State, with eligible initial directors and a compliant name

Documents to Have in Place Before Opening

• Bylaws addressing the shareholding floor, transfer restrictions, and what happens on death, incapacity or license loss
• A shareholder agreement with buy-sell terms, valuation mechanics and reserved matters limited to business rather than clinical decisions
• A written medical director agreement describing real duties, availability, authority and fair market value compensation not tied to treatment volume
• Clinical employment or contractor agreements signed by the professional corporation, not by the management company
• If using an MSO: a management services agreement with specified deliverables, a fee supported by a written fair market value analysis, and separate premises and equipment leases
• Standardized procedures where required by the practitioner's designation, and written clinical protocols approved by the medical director for every treatment offered

Clinical Governance From Day One

• Good faith examination and treatment ordering assigned to a practitioner authorized to perform them, before any treatment is delivered
• A written delegation and supervision matrix showing which license type may perform which treatment, and under whose order
• Protocols on file and version-controlled, with documented review dates and genuine clinical sign-off
• Emergency protocols and stocked equipment matched to the treatment menu, including adverse reaction management
• Medical records owned by and held in the name of the professional corporation, with access controls that reflect that ownership

Ongoing Maintenance

• An annual structural review reconciling the share register and officer roles against current license status
• Periodic re-testing of the management fee against fair market value as the service mix changes, with the analysis retained
• Board minutes showing the professional corporation making its own clinical and business decisions
• A legacy contract review against SB 351, given that its prohibitions reach agreements already in force
• A trigger list — new investor, new location, departing shareholder, license change — that prompts legal review before rather than after the event

The California med spa compliance checklist covers the operational side of opening, and many California owners begin from a ready-to-use med spa SOP and compliance library and tailor the templates to their menu and structure rather than drafting every protocol from scratch.

California Med Spa Ownership in Plain Terms

Reduced to its essentials, California's position is consistent and unusually firm:

• The entity delivering medical treatment must be a professional corporation; an LLC or general corporation cannot hold professional powers, whoever owns it
• Physicians must hold at least 51% of a medical corporation, and only the license types listed in section 13401.5 may hold the remaining 49%
• The number of non-physician licensee shareholders may not exceed the number of physician shareholders — a separate test from the percentage
• Estheticians, managers and lay investors cannot hold equity in the clinical entity; the MSO is the only route, and only for genuine non-clinical services at fair market value
• A qualifying 104 NP can own a nursing corporation independently as of 2026, within the population focus of their certification
• There is no med spa license or medical corporation registration from the Medical Board; section 13401(b) exempts Medical Board licensees from the certificate requirement
• Clinical authority — protocols, staffing, treatment decisions, records, throughput — must genuinely sit with the practice, and SB 351 now names much of that expressly
• Getting it wrong reaches the individual licenses, the contracts and the money, and it is markedly more expensive to unwind than to build correctly

For how California compares with the rest of the country, our med spa regulations by state reference sets each state's ownership rule against its statute, and the California resource hub collects the rest of our state-specific guidance.

This article is for informational purposes only and does not constitute legal advice. California corporate practice of medicine, professional corporation and fee-splitting rules are complex, fact-specific and subject to change, and statutes cited here may have been amended since publication. Consult a qualified California healthcare attorney before structuring, financing or restructuring med spa ownership.

Frequently Asked Questions