Guide

Nursing corporation, PLLC or PC: what your nursing board requires

Summary

Whether a nurse practitioner may own a PLLC depends on the state. Some states let licensed professionals form a professional limited liability company; California does not, and routes nurses to a statutory nursing corporation whose agency under the professional corporation act is the Board of Registered Nursing. Two questions settle it: does the state permit an LLC to render professional services at all, and who may own it. Both answers sit in the state's own business code.

By Gale Editorial · Updated 2026-09-01. Every figure cited to a dated source. How we write.

Can a nurse practitioner own a PLLC?

In some states, yes. In others there is no such entity for a nurse to own, and the state's answer is a nursing corporation or a professional corporation instead. This is one of the questions where no national answer exists: the rule sits in your state's business code and with your board, and the three states below land in three different places.

Two questions decide it, in this order. Does your state permit a limited liability company to render professional services at all? If it does, who may hold the membership units? A state that answers no has answered the whole question for you, and what remains is a choice among the corporate forms it does recognize.

California answers no. Its Revised Uniform Limited Liability Company Act provides that nothing in it may be construed to permit a domestic or foreign limited liability company to render professional services in the state, and an LLC may render a licensed service only where the Business and Professions Code affirmatively authorizes an LLC to hold that license 1. So a California nurse practitioner forms a nursing corporation, the statutory form at Business and Professions Code sections 2775 through 2781. The agency the Moscone-Knox Professional Corporation Act refers to for that corporation is the Board of Registered Nursing 2.

The first test: may an LLC render professional services in your state?

It depends on the state, so look this up in your state's business code before anything else: it eliminates whole branches at once. Texas allows a professional limited liability company: its Secretary of State's formation FAQs set out the ownership, governing-person and officer rules for the PLLC, the professional corporation and the professional association side by side, citing Business Organizations Code sections 301.004 and 301.007 3.

Texas also publishes a chart. The Secretary of State's Guide for Determining Permissible Entity Types for Licensed Professions, revised August 2017, marks the Nurse row for the professional corporation and the professional limited liability company only, with no for-profit corporation and no ordinary LLC. The Nurse Anesthetist row carries the same two, and Nurse, Psychiatric adds the professional association 4. The page linking the guide says it is not a substitute for the advice of a private attorney and is subject to change without notice, which is the right weight to give it.

Most secretary of state sites carry one of those two things, a formation FAQ or a permissible-entity table. Search them for your profession alongside the words PLLC, PC, or plain LLC. Where the site says nothing about nurses, the question moves to the board of nursing and to whatever the state calls its professional corporation act.

The second test: who is allowed to own it

Ownership rules are where a plan for a co-owner falls apart, and they are stricter than most solo practices expect. Texas runs the test on a defined term: a professional individual is someone licensed to provide the same professional service the entity renders, so a license in another health profession does not qualify a person to own the entity 3.

Within Texas the entity types then differ in who may sit where. Owners of a PLLC or a PC may be a professional individual or a professional organization, and a PLLC's governing persons may be either. A PC's governing persons must be professional individuals, and only a professional individual may be an officer of either. A professional association is tighter still: its owners, governing persons and officers must all be professional individuals, and its governing persons and officers must also be members 3.

California is stricter again at the top of the cap table. Every shareholder, director and officer of a nursing corporation must be a licensed person, and the only offices the statute excepts are an assistant secretary and an assistant treasurer 5.

There is a narrow opening for co-owners from other professions, and it arrives with two limits at once. Corporations Code section 13401.5 lets certain other licensed persons hold shares so long as the sum of all shares they own does not exceed 49 percent of the total number of shares. Their number is capped too: it may not exceed the number of persons licensed by the agency regulating the corporation, which for a nursing corporation means registered nurses 6. The 49 percent is the statute's outer cap rather than a target. Who qualifies is enumerated, and every category on the list is itself a licensee: physicians and surgeons, doctors of podiatric medicine, psychologists, optometrists, marriage and family therapists, clinical social workers, physician assistants, chiropractors, acupuncturists, naturopathic doctors, professional clinical counselors and licensed midwives 6. An unlicensed spouse or investor appears nowhere on it, and the list is amended often enough to be worth reading in its current text.

Where the nursing board sits in the filing path

Some states put a licensing agency in front of the secretary of state, and filing in the wrong order costs weeks. New York is the clearest case: a domestic PLLC in a licensed profession must obtain a Certificate of Authority from the State Education Department's Office of the Professions before the Articles of Organization go to the Department of State, and that application is made only through the mail 7.

The Office charges its own fee for that application, $10.00 per member, with $20.00 for a later certificate of amendment, separate from whatever the Department of State charges on the Articles of Organization 7. Budget two filings with two fees.

Whether a board stands in the filing path is not a national rule. Read the board's own business page alongside the secretary of state's formation page: usually only one of the two mentions the other, and that is the one that will stop your filing.

Entity type and tax election are two different decisions

Forming a professional entity and choosing how it is taxed happen at two different agencies, and collapsing them produces a question with no answer as asked: whether to be an S corporation instead of a PLLC. The Texas Secretary of State notes in its own formation FAQs that the S and C designations are federal tax provisions rather than state entity types 3.

The order that works is state first, then federal: your state's statutes decide what you may form and who may own it, and the federal classification then decides which return the entity files. The entity decision and the tax election can be made in the same week, and they are still answered by different documents.

Where the election lands depends on numbers only you and your accountant can see: reasonable compensation, payroll cost, how your state taxes the entity. Bring the formation documents to that conversation rather than picking an election first and shopping for an entity to fit it.

How to find your own state's answer in an hour

Three pages settle it for most states, and all three are free. Start with the secretary of state's formation FAQs or its permissible-entity guide, which is where Texas publishes the nursing rows 4. Then read the section of your state's LLC act describing what a limited liability company may and may not do, since that is the kind of section California's bar on professional services sits in 1.

The third page is the board of nursing's own site, searched for the words corporation, entity or business. A board that regulates the corporate form tends to say so there, the way California's statute names the Board of Registered Nursing as the agency the professional corporation act refers to 2.

Write down four things as you read, because they are what a filing clerk or an attorney asks for first:

  • the statute section permitting or barring an LLC that renders professional services
  • the entity types your state names for nurses, in its own words
  • who may be an owner, a governing person and an officer of each type
  • whether a licensing agency must certify the entity before the secretary of state accepts the filing

What entity choice does not decide, and when counsel earns its fee

Entity choice decides who may own the practice and which forms create it. It does not decide your scope of practice, which turns on whether your state requires a collaborative agreement or protocol; it does not change how you are paid, which is where the Medicare 85% rule for NPs sits; and it says nothing about how you introduce yourself, which is the separate question of the Dr title for DNPs.

Most single-owner formations are a form and a fee. Four situations change that, and each is cheaper to take to a lawyer before the filing than after: a co-owner not licensed in your own profession, ownership split across two or more states, buying into a practice that already has an entity, and any arrangement in which an investor or a management company would hold an economic interest. The last runs into the corporate practice doctrine, a separate body of law from the entity statutes, and no formation page answers it.

If the entity is formed before the ownership rule is read, the fix is an amendment filing, another wait, and in New York another certificate of amendment with its own fee 7.

Common questions

No. Some states do not permit a limited liability company to render professional services at all, and California is one of them: its LLC act bars professional services, and the form for nurses there is a statutory nursing corporation whose agency under the professional corporation act is the Board of Registered Nursing. Texas takes the other path and names both the professional corporation and the PLLC for nurses.

Usually only where they hold a qualifying license. Texas measures ownership against a professional individual, meaning someone licensed to provide the same service the entity renders. California allows certain other licensed professionals into a nursing corporation, capped at 49 percent of shares and at a head count tied to the number of licensed nurses, and every category on its list is itself a licensee.

No, and they are not alternatives. The professional corporation or PLLC is created by state law and decides who may own the practice. S and C are federal tax classifications, a point the Texas Secretary of State makes in its own formation FAQs. The two questions are settled at different agencies and in different documents. Run the election with your accountant against your own numbers.

It depends on the state, and there is no national rule to fall back on. New York requires a Certificate of Authority from the State Education Department's Office of the Professions before the Articles of Organization reach the Department of State, applied for by mail, with a fee of $10.00 per member. Read your board's business pages and your secretary of state's formation pages together.

In a state that bars LLCs from rendering professional services, no. Where a PLLC exists, the plain LLC and the professional one are different filings carrying different ownership rules. The Texas Secretary of State's permissible-entity guide, revised August 2017, marks the Nurse row for the professional corporation and the PLLC only, and marks neither the ordinary LLC nor the for-profit corporation.

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References

  1. 1.California State Legislature (2012). Corporations Code § 17701.04 — Nature, purpose, and duration of limited liability company (California Revised Uniform Limited Liability Company Act). California Legislative Information (leginfo.legislature.ca.gov). link ✓That a California LLC may not render professional services, and may render a licensed service only where the Business and Professions Code authorizes an LLC to hold that license, which is why there is no California PLLC route for a nurse practitioner; also cited for the kind of LLC-act section that carries such a bar.
  2. 2.California State Legislature (1981). Business and Professions Code § 2775 — Nursing Corporations (Division 2, Chapter 6, Article 3.5 [2775-2781]). California Legislative Information (leginfo.legislature.ca.gov). link ✓That California recognizes a statutory nursing corporation under Article 3.5, and that the governmental agency referred to in the Moscone-Knox Professional Corporation Act for that corporation is the Board of Registered Nursing.
  3. 3.Texas Secretary of State, Business & Public Filings Division (2026). Formation of Texas Entities FAQs. Texas Secretary of State (sos.state.tx.us). link ✓The Texas definition of a professional individual as someone licensed to provide the same professional service the entity renders, the per-entity owner, governing-person and officer restrictions for the PLLC, PC and professional association under BOC sections 301.004 and 301.007, and the point that the S and C designations are federal tax provisions rather than state entity types.
  4. 4.Texas Secretary of State (2017). Guide for Determining Permissible Entity Types for Licensed Professions. Texas Secretary of State (sos.state.tx.us), Revised August 2017. link ✓Which entity types the Secretary of State's guide marks on the nursing rows (PC and PLLC for Nurse and Nurse Anesthetist, with PA added for Nurse, Psychiatric), its Revised August 2017 date, and the linking page's warning that the guide is not a substitute for the advice of a private attorney and is subject to change without notice.
  5. 5.California State Legislature (1981). Business and Professions Code § 2779 — Nursing corporations: shareholders, directors and officers. California Legislative Information (leginfo.legislature.ca.gov). link ✓That every shareholder, director and officer of a California nursing corporation must be a licensed person, with an assistant secretary and an assistant treasurer as the only offices the section excepts.
  6. 6.California State Legislature (2022). Corporations Code § 13401.5 — Professional corporations: permitted licensed shareholders, officers, directors and professional employees (amended by Stats. 2022, Ch. 290 (AB 2671)). California Legislative Information (leginfo.legislature.ca.gov). link ✓The 49 percent outer cap on shares held by cross-licensed persons, the accompanying head-count limit tied to the number of persons licensed by the regulating agency, and the enumerated list of other licensed professionals who may hold shares in a nursing corporation.
  7. 7.New York State Education Department, Office of the Professions (2026). 6. Professional Service Limited Liability Companies (PLLC). NYSED Office of the Professions, Corporate Entities (op.nysed.gov). linkThat a New York domestic PLLC in a licensed profession must obtain a Certificate of Authority from the Office of the Professions before filing Articles of Organization with the Department of State, that the application is made only by mail, and the Office's fee of $10.00 per member with $20.00 for a certificate of amendment.

https://www.gale.care/for-providers/pq-nursing-corporation-entity-choice · 7 sources. Competitor details are cited to dated public sources and maintained as they change; figures are estimates, not commitments. Synthetic demonstration.

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