If you operate a healthcare practice in DC, you're dealing with some of the strictest ownership rules in the country. The District requires 100% licensed physician ownership—no exceptions for private equity or hospital systems—and stacks all your major deadlines in April.
Managing a DC healthcare entity requires strict adherence to ownership restrictions that prohibit non-physician investment, tracking biennial reports filed every two years, and meeting concentrated April deadlines for both reports and franchise taxes. Missing the April 1 biennial deadline results in a $100 penalty in addition to the $300 filing fee. When any physician's license lapses, the entire ownership structure becomes non-compliant immediately.
DC's April compliance deadlines add complexity: biennial reporting occurs every two years, and franchise tax obligations come due annually. Healthcare administrators must maintain meticulous calendar management and thorough understanding of entity-level requirements to avoid penalties and maintain good standing.
The District of Columbia recognizes two professional business entity types for healthcare service delivery: Professional Corporations (PCs) governed by the Professional Corporation Act of 2010 (DC Code §§ 29-501 through 29-516), and Professional Limited Liability Companies (PLLCs) established under DC Code Title 29, Chapter 8. Notably, DC does not recognize "Professional Associations" (PAs) as business entities for medical practice; DC Code Title 44, Chapter 8 defines professional associations strictly as membership organizations for peer review, not practice structures. This statutory framework distinguishes DC from states like Texas or Florida where PAs serve as common healthcare practice entities.
The Professional Corporation Act of 2010 establishes comprehensive requirements for medical professional corporations in the District. DC Code § 29-508 mandates four absolute requirements: (1) 100% licensed physician ownership with all shareholders holding active DC medical licenses under DC Code Title 3, Chapter 12, (2) all directors must be licensed physicians, (3) all officers (CEO, CFO, Secretary) must hold medical licenses, and (4) shares can transfer only to licensed physicians or the corporation itself per DC Code § 29-511, preventing any sale to non-physicians even upon death or retirement.
DC Code § 29-510 requires professional corporations to remain subject to all professional standards and licensing requirements applicable to individual practitioners. Individual professionals retain personal liability for their own professional negligence and malpractice, while the corporate structure provides limited liability protection for shareholders regarding the negligence of other shareholders.
PLLCs operating in DC follow similar ownership restrictions under the limited liability company framework. DC Code § 29-101.02(38) defines PLLCs as limited liability companies formed specifically for rendering professional services requiring licensure. The same ownership mandates apply: only licensed professionals authorized to provide the specific healthcare services may serve as members, and managers must maintain active licensure in the relevant healthcare profession.
DC Code § 29-803.04 establishes liability provisions protecting members and managers from personal liability for entity obligations while preserving individual professional liability for malpractice. The Articles of Organization must include evidence of professional licensure for all members, and the DC Board of Medicine does not require any approval (pre- or post-formation) for PLLC establishment.
The District of Columbia enforces corporate practice of medicine restrictions through the statutory licensing requirements in DC Code § 29-508, creating functional CPOM prohibitions without an explicit standalone statute. This approach differs from states with express CPOM statutory language but achieves the same practical result: corporations cannot employ physicians or own medical practices through traditional corporate ownership structures.
The Health Occupations Revision Act reserves medical practice to licensed individuals. Combined with 100% ownership requirements, this blocks corporate ownership. The Board actively disciplines unauthorized structures, as shown in In re Mohammad Hoque, MD (June 4, 2024).
Healthcare professionals forming PCs or PLLCs in the District must complete specific filing requirements with the DC Department of Licensing and Consumer Protection (DLCP). The formation process does not require Board of Medicine pre-approval or post-approval, streamlining the timeline compared to jurisdictions with regulatory review requirements.
File formation documents through the CorpOnline portal, by mail to Department of Licensing and Consumer Protection, Corporations Division, PO Box 92300, Washington, DC 20090, or call (202) 442-4432. The Articles of Incorporation must include the corporate name with proper professional designation, the specific professional services to be rendered, names and addresses of all shareholders or members, a statement that all shareholders and members are duly licensed in the relevant healthcare profession, names and addresses of registered agent with a physical DC street address (P.O. Box not acceptable), and documentation of licensing status for all shareholders, directors, and officers.
DC healthcare entities face three primary annual compliance obligations with concentrated April deadlines requiring careful calendar management.
Healthcare entities in the District of Columbia must file a biennial report every two years with the DC Department of Licensing and Consumer Protection. According to the BRA-25 Form Instructions:
Filing Methods:
Professional corporations face corporate franchise tax requirements under Form D-20. According to DC Business Franchise Tax Rates, minimum tax amounts depend on gross receipts: $250 for entities with DC gross receipts of $1 million or less, and $1,000 for entities with DC gross receipts exceeding $1 million.
Minimum Tax (low receipts): $250 for entities with DC gross receipts of $1 million or less
Minimum Tax (high receipts): $1,000 for entities with DC gross receipts exceeding $1 million
Annual Deadline: April 15 (for calendar year filers)
Healthcare entities operating as unincorporated businesses (such as partnerships or sole proprietorships) must file Unincorporated Business Franchise Tax forms (Form D-30) with the same April 15 deadline. Small businesses with gross income of $12,000 or less may file an affidavit (Form D-30N) instead of a full return.
No legislative changes to business entity annual requirements occurred during 2024-2026. The 2025 Subject to Funding Legislation Quarterly Report from the DC Council documented no enacted legislation modifying biennial report requirements, franchise tax structures, filing deadlines, or fee schedules for business entities during this period.
The concentration of compliance obligations in April (with biennial reports due on April 1 every two years and franchise tax due on April 15 annually) requires healthcare administrators to plan cash flow and filing coordination carefully to avoid late penalties ($100 additional fee for biennial reports filed late) and maintain continuous good standing.
The District of Columbia Department of Health, Board of Medicine (2201 Shannon Place SE, Washington, DC 20020; 877-672-2174; doh@dc.gov) serves as the licensing authority for physicians.
According to DC Municipal Regulations § 17-4614, physicians must complete 50 hours of American Medical Association Physician Recognition Award (AMA/PRA) Category I continuing education credits during the two-year period preceding license expiration. Approved programs must meet standards established in DC Municipal Regulations § 17-4615.
Unlike many jurisdictions, DC Municipal Regulations do not mandate separate hour requirements for specific subject areas such as ethics, pain management, cultural competency, opioid prescribing, or other specialty topics. This simplified structure creates straightforward compliance compared to states with detailed subject-matter mandates. Physicians must maintain documentation of completed continuing education, and the Board maintains authority to conduct random audits of CME compliance.
According to DC Municipal Regulations § 17-4006, physician licenses operate on two-year renewal cycles. The Department mails renewal applications at least 60 days before expiration, with licenses requiring renewal by the expiration date printed on the license. A 60-day grace period after expiration allows late renewal with payment of late fees, but failure to renew within this grace period results in license lapse requiring reinstatement application and reinstatement fees.
The DC Health Medicine Fee Schedule establishes a $50 base renewal fee, with criminal background checks adding $50 when required (potential total: $100). Late renewal fees apply during the 60-day grace period, and separate reinstatement fees apply for licenses that lapse beyond the grace period.
License lapse creates immediate ownership compliance issues for professional entities. Since DC Code § 29-508 requires all shareholders, directors, and officers to maintain active licensure, a lapsed physician license triggers mandatory share redemption or transfer. Entity bylaws should establish procedures for handling license lapse situations.
Physicians with ownership stakes in healthcare entities must file Form DC-1513 (Disclosure of Ownership and Control Interest Statement) with the DC Board of Medicine, reporting direct and indirect ownership interests, control interests affecting entity management, and information about managing employees.
DC Code § 29-508 requires all shareholders, directors, and officers to hold the same professional license. The DC Board of Dentistry regulations explicitly restrict dental ownership to dentists only. Consult DC-licensed healthcare attorneys for multi-discipline structures.
No. DC Code § 29-508 requires 100% of shareholders, directors, and officers of medical professional corporations to be licensed physicians. This creates absolute barriers to corporate ownership by private equity firms, venture capital investors, hospital systems (absent specific statutory authority), insurance companies, or any non-physician business entities. DC Code § 29-511 further restricts share transfers exclusively to licensed physicians or the professional corporation itself, preventing sale or transfer to corporate entities.
License lapse or revocation triggers immediate ownership compliance issues since DC Code § 29-508 mandates continuous licensure for all shareholders, directors, and officers. Shares must be transferred to licensed physicians or redeemed by the corporation. Entity bylaws should establish clear procedures, valuation methods, and timelines for handling involuntary transfers due to license lapse, revocation, death, or disability. The 60-day grace period after license expiration under DC Municipal Regulations § 17-4006 allows physicians time to complete late license renewal before the license fully lapses and reinstatement becomes necessary, making proactive license renewal tracking essential for healthcare entities.
Yes. DC requires biennial reports every two years, not annual reports. According to Form BRA-25 instructions, all professional corporations and PLLCs must file by April 1 every two years with a $300 filing fee. The first report is due April 1 of the year following formation for domestic entities. Late filing incurs a $100 penalty (total cost: $400).
Both PCs and PLLCs require 100% licensed physician ownership, but differ in fee structure, governance, and tax treatment. Formation fees for PCs are based on authorized capital per the DLCP fee schedule: $99 for up to $100,000, $550 for $100,001-$500,000, $1,100 for $500,001-$1,000,000, and $1,650 for over $1,000,000 in authorized capital, while PLLCs have a flat $99 filing fee regardless of capital structure. PCs follow corporate governance with shareholders, directors, and officers (all requiring medical licenses), while PLLCs operate with members and managers under more flexible operating agreements. Both provide the same liability protection under DC Code § 29-510.
No. Unlike some jurisdictions requiring regulatory pre-approval or post-approval of professional entities, DC imposes no Board of Medicine approval requirement for PC or PLLC formation. According to DC Code Title 29, Chapter 5, the regulatory framework requires individual shareholders, directors, and officers to maintain active professional licenses, but no entity-level approval mechanism exists. Healthcare professionals should verify all shareholders hold valid DC licenses through DC Health License Verification before filing formation documents with DLCP, but no separate Board approval step is required in the formation process. This streamlines formation timelines, with standard processing completed within 5 business days or same-day/3-day expedited options available for additional fees.
DC healthcare entity compliance requires tracking biennial filings across multiple entities ($300 every two years), monitoring annual franchise tax deadlines ($250-$1,000 per entity), verifying continuous physician licensure for all owners, and documenting ownership changes. Manual tracking systems become increasingly complex as practices manage multiple entities and physician licenses simultaneously.
Discern provides centralized compliance management for DC healthcare entities. The platform tracks biennial report deadlines, manages franchise tax schedules, monitors physician license renewals, and provides advance deadline notifications. Automated tracking reduces administrative time spent on deadline management and compliance verification.
Healthcare organizations benefit from centralized management of formation documents, deadline tracking, and ongoing compliance monitoring for DC professional entities.
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 District of Columbia entities stay in good standing.
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