Licensed chiropractors who wish to start a business in California should be aware of the state’s specific legal requirements. Corporate lawyers generally advise forming a Professional Corporation instead of a chiropractic LLC due to state regulations.
Legal Structure and Taxation
California law does not permit chiropractors to form a Limited Liability Company (LLC) for their practice. Chiropractors must establish a Professional Corporation and follow the Moscone-Knox Professional Corporation Act.
- Every LLC organized in California is subject to an annual tax of $800.
- Chiropractors have the option of converting an existing LLC into a Professional Chiropractic Corporation. This allows them to avoid dissolving their business while ensuring compliance with state law.
- The California Legislature prohibits professionals such as chiropractors from forming LLCs to limit liability for potential mistakes.
- Chiropractors must consult an attorney to understand which professionals are allowed to form an LLC in California.
Steps to Establish a Chiropractic Corporation
To legally provide chiropractic services, practitioners must adhere to several key steps:
- File Articles of Incorporation to form the Corporation.
- Notify the state chiropractic agency.
- Appoint directors to the board.
Financial Considerations
Setting up a chiropractic business involves significant initial costs and ongoing expenses:
- Estimated starting costs: $50,000 – $115,000.
- Major expenses: Office space setup, chiropractic tables, computer systems, and other equipment.
- Chiropractors typically charge $50-$150 per session for their services.
- Profit margins average 30-35%, after accounting for overhead costs of up to 70%.
Professionals also need to consider the need for legal and business advice to ensure compliance and guide decision-making on budgeting, taxes, and financial planning.
Chiropractic Licensing in California
Chiropractors have been state-licensed since 1922 through the California State Board of Chiropractic Examiners. They are authorized to diagnose and treat musculoskeletal conditions with a focus on spinal and nervous system health. Building a successful practice requires adherence to industry standards and regulations, as well as providing exceptional service.
The text repeats information on the licensing of chiropractors in California. To avoid redundancy, we have retained the section above that already covers this topic comprehensively.