A psychological corporation is a corporation that is authorized to render professional services, as defined in Section 13401 of the Corporations Code, so long as that corporation and its shareholders, officers, directors, and employees rendering professional services who are psychologists, podiatrists, registered nurses, optometrists, marriage and family therapists, licensed professional clinical counselors, licensed clinical social workers, chiropractors, acupuncturists, or physicians are in compliance with the Moscone-Knox Professional Corporation Act, this article, and all other statutes and regulations now or hereafter enacted or adopted pertaining to that corporation and the conduct of its
affairs.
Article 9Psychological Corporations
Section § 2995
A psychological corporation in California can offer professional services if it follows certain laws. This includes making sure its owners and employees who provide services, like psychologists or marriage counselors, follow specific rules. These rules include the Moscone-Knox Professional Corporation Act and other related laws that apply to their business operations.
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Section § 2996
This law says that it's considered unprofessional behavior for a licensed person to break any rules of this chapter, try to break them, help someone else to do so, or plan to break them. This also includes breaking rules from the Moscone-Knox Professional Corporation Act or any related regulations.
It shall constitute unprofessional conduct and a violation of this chapter for any person licensed under this chapter to violate, attempt to violate, directly or indirectly, or assist in or abet the violation of, or conspire to violate, any provision or term of this article, the Moscone-Knox Professional Corporation Act, or any regulations duly adopted under those laws.
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Section § 2996.1
This law states that a psychological corporation must follow the same professional standards as an individual psychologist. It means the corporation can't do anything that is considered unprofessional conduct, just as a licensed psychologist can't, and needs to comply with all applicable laws and regulations.
A psychological corporation shall not do or fail to do any act the doing of which or the failure to do which would constitute unprofessional conduct under any statute or regulation now or hereafter in effect. In the conduct of its practice, it shall observe and be bound by such statutes and regulations to the same extent as a person licensed under this chapter.
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Section § 2996.2
If someone owns shares in a psychological corporation but is not eligible to provide psychological services, they can't benefit financially from the company's income earned through those services.
The income of a psychological corporation attributable to professional services rendered while a shareholder is a disqualified person, as defined in Section 13401 of the Corporations Code, shall not in any manner accrue to the benefit of such shareholder or his or her shares in the psychological corporation.
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Section § 2997
In a psychological corporation, nearly everyone involved, like shareholders, directors, and officers, must be licensed professionals in the field, except for certain roles like an assistant secretary or assistant treasurer. There are a few exceptions outlined in other parts of the law.
Except as provided in Sections 13401.5 and 13403 of the Corporations Code, each shareholder, director and officer of a psychological corporation, except an assistant secretary and an assistant treasurer, shall be a licensed person as defined in Section 13401 of the Corporations Code.
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Section § 2998
If a psychological corporation wants to choose a name or any name under which it offers its services, it must include a word from Section 2902(c) and indicate that it's a corporation, like using 'Inc.' or 'Ltd.'
The name of a psychological corporation and any name or names under which it may render professional services shall contain one of the words specified in subdivision (c) of Section 2902, and wording or abbreviations denoting corporate existence.
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Section § 2999
This law allows the board to create and enforce rules for psychological corporations, including rules about what happens to the shares of a disqualified or deceased shareholder. It requires these corporations to have rules for buying back shares and mandates that they have insurance or another form of security to cover claims from clients or patients related to their professional services.
The board may adopt and enforce regulations to carry out the purposes and objectives of this article, including regulations requiring (a) that the bylaws of a psychological corporation shall include a provision whereby the capital stock of that corporation owned by a disqualified person, as defined in Section 13401 of the Corporations Code, or a deceased person, shall be sold to the corporation or to the remaining shareholders of that corporation within any time as those regulations may provide, and (b) that a psychological corporation shall provide adequate security by insurance or otherwise for claims against it by its patients or clients arising out of the rendering of professional services.
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