If you're running a medical practice in Arkansas, you're juggling two separate regulators who both need to sign off on your business: the Arkansas Secretary of State handles your business entity paperwork, while the Arkansas State Medical Board controls your professional practice authorization. This dual oversight creates compliance headaches in three key areas: ownership restrictions (every owner must hold a permanent Arkansas medical license), physician licensing coordination (requiring continuous active licensure and 20 CME hours annually), and ongoing reporting obligations (including your May 1 annual franchise tax filing and Medical Board registration maintenance).
Arkansas takes the corporate practice of medicine doctrine seriously. State law prohibits non-physician ownership, corporate control over clinical decisions, and requires careful entity structuring to keep your practice legally compliant while preserving your clinical autonomy. You'll need to navigate Professional Corporation requirements, Professional Limited Liability Company regulations, or Limited Liability Partnership rules—each with their own statutory framework under Arkansas Code Annotated. Understanding these requirements prevents costly penalties and protects your ownership structure from technical violations that could jeopardize your entire practice.
If you're considering a Professional Corporation for your practice, here's what you need to know. PCs represent the traditional entity structure for medical practices in Arkansas, governed by a two-tier statutory framework. The general Professional Corporation Act appears in Arkansas Code Annotated §§ 4-29-201 to 4-29-218, while healthcare-specific provisions are codified in the Medical Corporation Act at Arkansas Code Annotated §§ 4-29-301 to 4-29-313.
Arkansas law lets licensed physicians form professional corporations to run medical practices for "the study, diagnosis, and treatment of human ailments" according to § 4-29-305.
Here's the non-negotiable rule on ownership: Arkansas Code Annotated § 4-29-307 requires that all officers, directors, and shareholders of your medical corporation must be licensed to practice medicine in Arkansas. Section 4-29-208 reinforces this: "No person who is not...licensed under the laws of this state may...be an officer, director, or shareholder of a professional corporation, nor may any person own, either legally or beneficially, manage, or control any shares of a professional corporation by proxy or in any other manner."
Your PLLC needs to register with the Arkansas State Medical Board and follow the same rules as medical corporations. Arkansas Code Annotated § 4-38-1202 establishes that "An LLC formed under this chapter that will engage in the practice of medicine...must obtain a certificate of registration from the Arkansas State Medical Board" and "must comply with the Medical Corporation Act, § 4-29-301 et seq."
PLLCs face parallel ownership restrictions. Your PLLC may render professional services "only through members, employees, managers, or agents who are duly licensed or otherwise legally authorized to render those services" according to Arkansas Code § 4-32-306. All members, managers, and organizers must hold permanent Arkansas medical licenses per the Arkansas State Medical Board Medical Corporation/LLC Application Packet.
Arkansas courts take the corporate practice of medicine doctrine seriously through statutory prohibitions, judicial precedent, and administrative interpretation. Arkansas Code Annotated § 17-95-202 defines the practice of medicine and explicitly restricts it to licensed individuals, prohibiting corporations from employing physicians to provide medical services unless within specific legal frameworks.
In Baptist Health v. Murphy, 337 S.W.3d 771 (Ark. 2010), the Arkansas Supreme Court held that economic credentialing policies are unlawful, ruling that hospitals cannot deny staff privileges based solely on economic interests in competing hospitals. The court explicitly stated that "decisions regarding physician privileges must be based on professional competence and qualifications, not economic interests," reinforcing that your medical decisions cannot be subordinated to corporate economic interests.
Arkansas Attorney General Opinion No. 2014-118 (issued March 10, 2015) provides binding guidance: corporations may engage in healthcare activities but must not interfere with the independent medical judgment of licensed physicians. Your medical decisions must be made by licensed physicians, and corporate structures must preserve your clinical autonomy.
Arkansas recognizes two primary exceptions: the traditional hospital exemption (allowing hospitals to employ physicians for patient care services) and Management Services Organizations (MSOs) that provide only administrative and business services without interfering with your medical judgment, while maintaining physician ownership of the clinical practice and avoiding fee-splitting arrangements.
When you're forming your medical entity in Arkansas, you'll need to complete a coordinated process involving both the Arkansas Secretary of State and the Arkansas State Medical Board. Here's what you'll need:
Your total minimum formation cost is $51.00 ($50 Secretary of State filing plus $1 Medical Board registration), or $76.00 if you reserve your name first. The Arkansas Secretary of State processes online filings within 1-3 business days according to the Business Services FAQ, while mailed documents require 7-10 business days.
You'll need to follow a specific two-step formation process. First, file your organizational documents (Articles of Incorporation for a PC or Certificate of Organization for a PLLC) with the Arkansas Secretary of State and pay the $50 filing fee. Once the Secretary of State approves and files these documents, submit the Medical Corporation/LLC Application Packet to the Arkansas State Medical Board along with a certified copy of the filed documents from the Secretary of State and a $1 registration fee.
Your Arkansas healthcare professional entity faces a single consolidated annual compliance obligation: the Annual Franchise Tax Report due May 1 each year. According to the Arkansas Secretary of State Franchise Tax Report Forms page, all domestic corporations and LLCs must file this report annually, with no separate annual report filing requirement beyond the franchise tax report.
Your PLLC pays a flat annual franchise tax of $150. If you've formed a stock-issuing PC, you'll pay the greater of $150 or 0.3% of outstanding capital stock. Non-stock PCs pay $300 annually.
If you fail to file or pay by May 1, you'll face a $25 late filing penalty plus 10% annual interest on unpaid balances. Persistent non-compliance can result in revocation of your authority to do business in Arkansas. No franchise tax or annual report exemptions exist for your healthcare professional entity—all professional corporations and professional limited liability companies must comply with standard annual franchise tax filing and payment requirements regardless of professional service type.
Senate Bill 262 (2025) reinforced existing prohibitions on non-physician ownership structures during the 95th General Assembly's 2025 Regular Session, but didn't modify annual compliance requirements, franchise tax obligations, or filing deadlines for professional healthcare entities.
The Arkansas State Medical Board regulates physician licensing through requirements that directly affect your healthcare entity ownership eligibility. As an owner of a professional medical entity, you must maintain a permanent Arkansas medical license at all times according to the Medical Corporation/LLC Application Packet. This continuous licensing requirement is statutorily mandated under Arkansas Code Annotated § 4-29-208 for Professional Corporations and Arkansas Code § 4-38-1202 for Professional Limited Liability Companies.
You must complete 20 CME hours annually to maintain your Arkansas license. This annual requirement directly affects ownership eligibility because professional entities require all owners to maintain valid licensure.
You must earn CME hours from your birth month of the previous year through your birth month of the current year. The Arkansas State Medical Board conducts random monthly audits, requiring selected physicians to submit certificates of CME completion to verify compliance per the Arkansas State Medical Board FAQ.
Your Arkansas medical license operates on an annual renewal cycle during your birth month. Your license automatically expires at midnight on the last day of your birth month if you don't renew it—there's no grace period.
If you fail to renew before the expiration date, you must pay a $50 late fee to reinstate an expired license. Because Arkansas Code § 4-29-208 requires PC and PLLC owners to be licensed "at all times," even brief lapses in licensure during renewal could potentially affect your ownership eligibility.
Arkansas strictly prohibits multi-discipline ownership of healthcare entities. According to Arkansas Code § 17-95-202, your medical corporation must limit all officers, directors, and shareholders to individuals holding permanent Arkansas medical licenses. Each professional entity must be owned exclusively by practitioners of a single profession—your medical professional corporation can only have physician owners, not a combination of physicians, dentists, and pharmacists.
No. Arkansas actively enforces the Corporate Practice of Medicine doctrine, and non-physician owned corporations cannot employ physicians to provide medical services. Only licensed physicians may own and control medical professional corporations and LLCs in Arkansas.
The only recognized exceptions are hospitals (under the common-law hospital exemption) and properly structured Management Services Organizations (MSOs) that provide only administrative and business services without interfering with your medical judgment. Even these exceptions require physician ownership of the clinical practice and prohibit fee-splitting arrangements.
Arkansas law requires that all officers, directors, and shareholders of professional corporations be "licensed pursuant to the laws of this state governing their respective professions at all times" according to Arkansas Code § 4-29-208. The statute further prohibits any unlicensed person from having "any part in the ownership, management, or control of the corporation."
While Arkansas statutes don't explicitly define how inactive, suspended, or expired license status affects ownership eligibility, a conservative interpretation suggests that an inactive or expired license may not satisfy the "licensed at all times" requirement. You must maintain continuous active licensure through annual renewal during your birth month and ensure compliance with all licensing requirements. Any changes to your license status should be addressed immediately with qualified Arkansas healthcare attorneys to avoid unintended loss of ownership eligibility.
No. Your Arkansas healthcare professional entity faces a single consolidated annual compliance obligation according to the Arkansas Secretary of State Franchise Tax Report Forms page. All domestic corporations and LLCs must file their Annual Franchise Tax Report by May 1 each year. No separate annual report filing requirement exists beyond this franchise tax report. The filing deadline is May 1 annually, with a $25 late filing penalty plus 10% annual interest on unpaid balances for reports filed after this date.
Both Professional Corporations and Professional Limited Liability Companies require all owners to hold permanent Arkansas medical licenses and must register with both the Arkansas Secretary of State and the Arkansas State Medical Board. The primary differences relate to governance structure and tax treatment. PCs follow corporate governance with officers, directors, and shareholders, while PLLCs use members and managers. For franchise tax purposes, PLLCs pay a flat $150 annually, while stock-issuing PCs pay the greater of $150 or 0.3% of outstanding capital stock (non-stock PCs pay $300). Both entity types pay the same $50 Secretary of State formation fee and $1 Medical Board registration fee. The choice between PC and PLLC typically depends on your desired governance structure, tax planning considerations, and professional liability protection preferences; consult with Arkansas-licensed healthcare attorneys and tax professionals for entity-specific guidance.
No. Arkansas law requires that your registered agent address be a physical street address in Arkansas. P.O. Boxes are explicitly not acceptable for registered office purposes according to Arkansas Secretary of State regulations. All business entities, including healthcare professional entities, must maintain a registered agent at a physical street address where the agent can receive service of process and legal correspondence during normal business hours.
Managing healthcare entity compliance across multiple jurisdictions creates operational complexity and administrative burden, particularly when coordinating Secretary of State filings, Medical Board registrations, annual franchise tax reports, and physician licensing renewals. These compliance obligations demand constant attention to avoid penalties, late fees, and potential revocation of business authority.
Discern provides comprehensive entity management solutions designed specifically for organizations managing complex compliance requirements across multiple jurisdictions. Most formation filings are completed in under 3 minutes. Our platform automates annual franchise tax reporting, provides registered agent services across all 50 states and Washington D.C., and delivers real-time compliance visibility that eliminates uncertainty about your entity status. Organizations managing 200+ entity registrations typically spend just 5-10 minutes annually on compliance coordination with Discern's automation.
Discern's Arkansas healthcare compliance features include: automated May 1 franchise tax deadline tracking, Certificate of Good Standing procurement, entity payment management across multiple professional entities, and auto-filing capabilities that reduce manual data entry errors. You'll receive real-time processing estimates for Secretary of State filings and automatic alerts before Medical Board registration renewals.
Healthcare organizations benefit from streamlined formation processes, automated deadline tracking, and coordinated multi-state compliance management that reduces the risk of missed deadlines and ownership structure violations.
Ready to simplify your healthcare entity compliance? Book a demo with Discern today and see how we can reduce your administrative burden while ensuring your Arkansas entities stay in good standing.
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