Iowa recognizes three distinct professional entity types for healthcare organizations: Professional Corporations (PCs) governed by Iowa Code Chapter 496C, Professional Limited Liability Companies (PLLCs) governed by Iowa Code Chapter 489, and Limited Liability Partnerships (LLPs) governed by Iowa Code Chapter 486A. The state explicitly authorizes sixteen healthcare professions to form these entities, including medicine, nursing, dentistry, and physician assistants. Critically, Iowa Code Section 489.1105 creates a "lawful combination" provision permitting physicians (both MD and DO) and physician assistants to co-own the same professional entity, a more permissive approach than many states' strict single-profession requirements.
Iowa Code Chapter 496C establishes the statutory framework for Professional Corporations in Iowa. According to Iowa Code Section 496C.2(4), professional corporations may be formed by licensed professionals in sixteen enumerated healthcare disciplines, including medicine and surgery, osteopathic medicine, nursing, dentistry, pharmacy, physician assistants, and physical therapy. All incorporators, shareholders, directors, and officers must hold and maintain active Iowa licensure in the same profession according to Iowa Code Sections 496C.6 and 496C.7.
Professional Corporations must include either "professional corporation" or "P.C." in their legal name according to Iowa Code Section 496C.5. The statute further requires that the corporate name must be one that could lawfully be used by an individual or partnership licensed to practice the authorized services in which the professional corporation is engaged.
Iowa Code Chapter 489, the Uniform Limited Liability Company Act, governs Professional Limited Liability Companies with specific provisions for healthcare practice. According to Iowa Code Section 489.1102, a PLLC must be organized solely for the purpose of engaging in the practice of one or more specific professions that can lawfully be practiced by licensed individuals. The ownership and management restrictions parallel those for Professional Corporations, with Iowa Code Section 489.1105 requiring that PLLCs may practice a profession only through members, managers, employees, or agents licensed to practice that profession in Iowa.
The PLLC structure provides liability protection similar to corporations while offering operational flexibility through the operating agreement rather than corporate bylaws.
Iowa Code Chapter 486A, the Uniform Partnership Act, provides the statutory foundation for Limited Liability Partnerships. Healthcare professionals may form LLPs with professional practice restrictions through cross-reference to Chapter 489's provisions.
Iowa enforces Corporate Practice of Medicine restrictions through statutory requirements rather than common law precedent. The state does not maintain a judicially-developed CPOM doctrine with case law establishing prohibited corporate structures.
Iowa Code Section 489.1105 explicitly authorizes medicine and surgery, osteopathic medicine and surgery, and physician assistants to practice together in lawful combination. This statutory authorization permits physicians and physician assistants to co-own the same professional entity, enabling integrated practice models.
Healthcare professionals forming professional entities in Iowa must complete filings with the Iowa Secretary of State while navigating unclear Board of Medicine registration requirements. The following table summarizes documented formation requirements:
The formation process involves filing Articles of Incorporation (for PCs) or Certificate of Organization (for PLLCs) with the Iowa Secretary of State. Both filings require a $50 base fee according to the Iowa Secretary of State Business Entity Forms and Fees. Healthcare professionals may reserve their desired entity name before filing formation documents by submitting Form 635_0051 with a $10 fee, securing the name for 120 days.
According to the Iowa Secretary of State's preclearance and expedited services guidance, professional entities can access expedited processing options. Those needing faster processing may pay an additional $15 for five-business-day processing (total $65) or $50 for two-business-day processing (total $100).
Iowa Code Chapter 496C does not explicitly require Board of Medicine certification before filing with the Secretary of State, though Iowa Code §496C.8 subjects individual practitioners to complete board oversight. The Board maintains a Professional Corporation Application Packet without documenting forms, fees, or processing times. Healthcare professionals should contact the Iowa Board of Medicine at (515) 281-5171 before entity formation to clarify filing sequence and requirements.
Iowa healthcare professional entities face biennial reporting obligations with no franchise tax burden. The state eliminated its franchise tax after 2021, providing cost savings compared to jurisdictions that maintain franchise taxes on business entities.
Professional Limited Liability Companies (PLLCs) must file biennial reports in odd-numbered years, while Professional Corporations (PCs) file in even-numbered years. The filing window for all entities runs from January 1 through April 1 of the applicable year according to the Iowa Secretary of State biennial report requirements. This staggered system naturally distributes compliance burden for healthcare organizations operating multiple entity types.
PLLCs pay $30 online/$45 paper; PCs pay $60. Iowa Administrative Code 191-58.18(510) references a $100 late fee, though confirmation for biennial reports requires Secretary of State verification.
Healthcare professional entities structured as S-corporations can elect to operate as pass-through entities, avoiding entity-level income taxation. However, Professional Limited Liability Companies (PLLCs) are typically pass-through entities by default under Iowa tax law. Iowa offers a voluntary Pass-Through Entity Tax allowing partnerships and S corporations to pay Iowa income tax at the entity level rather than passing income through to individual owners, providing federal tax benefit by allowing entity-level deduction for state taxes paid.
Tax penalties for non-compliance include a 5 percent penalty for failure to file if less than 90 percent of tax is paid, and a 5 percent penalty for failure to pay if less than 90 percent of tax is paid by the due date according to the Iowa Department of Revenue Penalties and Interest. Both penalties may apply cumulatively for a 10 percent total penalty. Interest on unpaid taxes accrues at 10 percent annually (0.8 percent monthly).
Research of Iowa legislative activity from 2023 through 2025 reveals no changes to entity-level compliance requirements for healthcare professional entities. The Iowa General Assembly focused on healthcare appropriations (House File 2698 in 2024, House File 1049 in 2025), rural healthcare funding (House Study Bill 191 in 2025), and healthcare delivery system reforms. Biennial report requirements, filing fees, and entity compliance obligations remained unchanged, providing regulatory stability for compliance planning.
Iowa physicians must maintain active licensure to practice medicine under Iowa law, though a regulatory gap exists regarding how inactive license status affects professional entity ownership eligibility. Neither Iowa Code Chapter 496C nor the Iowa Board of Medicine regulations explicitly address whether inactive licensees can retain ownership interests in professional corporations.
To practice medicine in Iowa, physicians must hold a medical degree from an LCME or AOA-accredited institution and complete a minimum of one year of postgraduate training in an ACGME or AOA-accredited program. International medical graduates face a 24-month accredited postgraduate training requirement. According to the Iowa Board of Medicine, all applicants must pass one of the following approved examinations: USMLE, NBME examination, FLEX, NBOME examination, or COMLEX.
Iowa physicians must complete 40 hours of Category 1 CME credits biennially according to Iowa Administrative Code 653-11.4(272C). Licenses renew every two years on the physician's birthday at a cost of $450 for online renewal or $550 for paper renewal.
Within the 40-hour requirement, physicians may carry over up to 20 hours from the previous period, and may claim 50 credits for board certification or completion of residency/fellowship programs. Mandatory training includes child abuse reporting (2 hours/3 years for pediatric primary care), dependent adult abuse reporting (2 hours/3 years for adult primary care), chronic pain management (2 hours/5 years for opioid prescribers), and end-of-life care (2 hours/5 years for end-of-life providers). All mandatory hours count toward the 40-hour biennial requirement. Special licenses require 20 hours annually with no carryover.
Iowa physician licenses renew biennially on the licensee's birthday. Online renewal costs $450; paper renewal costs $550. A $50 late penalty applies for failure to renew before expiration.
Neither Iowa Code Chapter 496C nor Iowa Board of Medicine regulations explicitly address whether inactive license status disqualifies physicians from professional entity ownership. Iowa Code Section 496C.7 requires shareholders to be "licensed to practice" the profession, and Iowa Administrative Code 653-9.13 prohibits inactive licensees from practicing medicine. This ambiguity requires legal counsel review and direct Board contact at (515) 281-5171 for clarification.
Iowa Code Section 489.1105 establishes professional practice restrictions for PLLCs that create statutory authorization for specific healthcare professions to practice in lawful combination. Under this provision, physicians (MD), osteopathic physicians (DO), and physician assistants may co-own the same professional corporation or PLLC. This enables integrated practice models where physician assistants hold ownership interests alongside supervising physicians. Additionally, Iowa's lawful combination framework extends to mental health professions, permitting marital and family therapists, mental health counselors, psychologists, and social workers to share ownership within professional entities.
Physicians can co-own professional entities with physician assistants under Iowa's lawful combination statute (Iowa Code §489.1105), which explicitly authorizes medicine, osteopathic medicine, and physician assistants to practice together in the same professional entity. However, physicians cannot co-own professional entities with registered nurses, nurse practitioners, dentists, pharmacists, chiropractors, or other healthcare professionals not specifically listed in the lawful combination statute. Non-licensed individuals or passive investors cannot hold any ownership interests in Iowa professional healthcare entities.
Can a non-physician corporation employ physicians to provide medical services in Iowa?
No. Iowa Code Chapter 496C restricts medical practice ownership to licensed physicians, with one exception: Iowa Code § 489.1105 permits physicians and physician assistants to co-own professional entities in lawful combination. Medical practices must organize as professional corporations, PLLCs, or LLPs with ownership limited to licensed physicians or physician-physician assistant combinations.
What happens to my professional entity ownership if my Iowa medical license lapses?
Iowa law does not explicitly address this question. Iowa Code Section 496C.7 requires shareholders to be "licensed to practice" the profession, and Iowa Administrative Code 653-9.13 prohibits inactive licensees from practicing medicine.
The statute does not distinguish between active and inactive license status, creating compliance uncertainty. While inactive licensees retain the "privilege of licensure," they cannot practice medicine, suggesting potential ownership disqualification.
This interpretation is NOT explicitly codified. Healthcare professionals facing license lapses must seek legal counsel and contact the Iowa Board of Medicine at (515) 281-5171 to clarify whether inactive status disqualifies them from entity ownership.
Do I need to file biennial reports for my Iowa healthcare professional entity?
Yes. Iowa healthcare professional entities must file biennial reports with the Secretary of State. PLLCs file in odd years (2025, 2027) between January 1-April 1 for $30 online/$45 paper. PCs file in even years (2026, 2028) between January 1-April 1 for $60.
Should I form a Professional Corporation or Professional LLC for my Iowa medical practice?
Both entity types provide liability protection and meet Iowa's Corporate Practice of Medicine requirements, but differ in governance flexibility and tax treatment. Professional Corporations operate under owa Code Chapter 496C with formal corporate governance requirements including directors, officers, bylaws, and annual meetings. Professional LLCs operate under Iowa Code Chapter 489 with flexible management structures defined in the operating agreement. Formation costs $50 for both according to the Iowa Secretary of State; PLLCs file biennially for $30 (odd years) while PCs file for $60 (even years). Tax treatment differs if the PC operates as a C-corporation subject to Iowa corporate income tax (5.5%-7.1% of taxable income) versus the PLLC operating as a pass-through entity. Healthcare professionals should consult with legal and tax advisors to determine which structure best fits their practice model.
Can physician assistants co-own a medical practice with physicians in Iowa?
Yes. Iowa Code Section 489.1105 authorizes medicine, osteopathic medicine, and physician assistants to practice in lawful combination, permitting co-ownership in professional corporations or PLLCs. However, physicians cannot co-own with nurses, nurse practitioners, dentists, pharmacists, or chiropractors not listed in the lawful combination statute. Non-licensed individuals cannot hold ownership interests.
Managing biennial reporting cycles, coordinating staggered professional licensing requirements, and navigating documentation gaps regarding Iowa Board of Medicine entity pre-approval procedures creates ongoing administrative burden for Iowa healthcare organizations. The staggered compliance calendar between PLLCs (filing in odd-numbered years) and PCs (filing in even-numbered years) requires careful tracking to avoid late filing penalties. Additionally, the Iowa Board of Medicine maintains an entity registration process with undisclosed timing, fees, and procedures, necessitating direct Board contact to clarify requirements before initiating Secretary of State filings.
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