If you're starting a medical practice in Massachusetts, you'll quickly discover that choosing the wrong business structure can derail your entire operation. The state doesn't just regulate how you treat patients—it controls who can own your practice, how you structure ownership, and what you report to regulators.
Here's what makes Massachusetts different: the Corporate Practice of Medicine doctrine (established in McMurdo v. Getter, 1937) prohibits non-physicians from owning medical practices. This means you can't use standard LLC or corporation structures—you need professional entities with specific ownership restrictions.
Massachusetts enforces these rules through the Board of Registration in Medicine (243 CMR 2.00 and 2.11), combined with strict licensing requirements under Chapters 156A and 156C. Recent laws—S.2871 (effective July 18, 2024), H.5159 and Chapter 343 (effective January 8 and December 6, 2025), and H.4706 (effective November 5, 2025)—have added new layers of oversight for private equity involvement and market consolidation, creating additional compliance requirements for healthcare organizations.
Massachusetts recognizes four distinct professional entity structures: Professional Corporations (PCs) under M.G.L. Chapter 156A, Professional Limited Liability Companies (PLLCs) governed by M.G.L. Chapter 156C, Section 6, Professional Associations (PAs) established under M.G.L. Chapter 180, and Limited Liability Partnerships (LLPs) regulated by M.G.L. Chapter 108A, Section 45. Each structure carries distinct governance requirements, ownership restrictions, and annual compliance obligations that you need to understand before formation.
Massachusetts gives you four options for structuring your practice, each with different ownership rules and compliance costs. Here's what you need to know about each:
You can form Professional Corporations under M.G.L. Chapter 156A, which establishes stringent governance and ownership requirements distinct from standard business corporations.
PCs have three critical requirements under M.G.L. Chapter 156A, Sections 9, 10, and 18: (1) a majority of directors must be licensed in Massachusetts to render the stated professional service, (2) only licensed professionals can own shares—share certificates must state transfer restrictions and any unauthorized transfers are void by law, and (3) you must file annual certification of all shareholders' licensing status.
You'll need to attach a Certificate from the Massachusetts Board of Registration in Medicine approving your professional purpose when filing Articles of Organization. This creates ongoing coordination between your entity compliance and professional licensing throughout the life of your practice.
PLLCs follow similar rules under M.G.L. Chapter 156C, Section 6. All members and managers must be licensed professionals who maintain good standing with relevant Massachusetts licensing authorities. You'll need a certificate from the Board of Registration in Medicine confirming eligibility before filing your Certificate of Organization. PLLCs remain subject to ongoing board oversight throughout their existence, not just at formation.
PAs under M.G.L. Chapter 180 is rarely used for healthcare. They operate through membership classes rather than shares, with similar licensing requirements. The Secretary of Commonwealth must approve your Articles of Organization before you can operate, and you'll need annual reports certifying all members are duly licensed professionals.
M.G.L. Chapter 108A, Section 45 establishes the framework for LLPs. You'll need registration executed by a majority of partners that includes your Federal Employer Identification Number, partnership name, street address of principal office, and brief statement of business purpose.
Professional LLPs require additional documentation: description of professional services, names and addresses of all partners rendering professional services, statement of compliance with liability insurance rules, and a mandatory certificate from appropriate regulating boards confirming licensure of all partners.
Here's the catch: Massachusetts definitively enforces the Corporate Practice of Medicine (CPOM) doctrine, prohibiting non-physician entities from practicing medicine or employing physicians to provide medical services. The controlling precedent is McMurdo v. Getter, 298 Mass. 363, 10 N.E.2d 139 (1937), which held that a licensed practitioner could not practice as an employee of an unlicensed person or corporation. This nearly 90-year-old precedent has never been overturned.
The Board of Registration in Medicine enforces CPOM through 243 CMR 2.11, which requires you to hold majority ownership in your medical practice entity. Non-physicians, including corporations and other business entities, are generally prohibited from owning a controlling interest. You must report your ownership interest and percentage biennially during license renewal, with violations subject to disciplinary action including fines, license suspension, or license revocation.
Limited exceptions exist under M.G.L. Chapter 176C, Section 2, which exempts medical service corporations (primarily health insurance and managed care entities) from CPOM restrictions. Management Services Organizations (MSOs) can provide administrative services like billing, IT, and scheduling, but they cannot influence medical decisions, employ physicians, or engage in fee-splitting. Your physician-owned practice must maintain full clinical control.
You'll need to obtain a Certificate by Regulatory Board from the Massachusetts Board of Registration in Medicine and attach it to your Articles of Organization or Certificates of Organization before filing with the Massachusetts Secretary of the Commonwealth. This certificate confirms you're properly licensed to practice medicine in Massachusetts and that your proposed entity complies with professional practice regulations under 243 CMR 2.00.
The formation process begins with optional name reservation through the Secretary of the Commonwealth for $30.00, securing the name for 60 days. Professional Corporations require filing Articles of Incorporation with a base fee of $275.00, which covers up to 275,000 authorized shares. Each additional 100,000 shares (or portion thereof) adds $100.00. Professional LLCs require filing a Certificate of Organization with a flat $500.00 fee regardless of membership interests.
Both entity types must designate a registered agent (for corporations) or resident agent (for LLCs) who maintains a physical address in Massachusetts and receives legal documents per M.G.L. Chapter 156D, Section 15.10. Electronic filing of agent changes is free, while paper or fax submissions cost $25.00.
Navigating this ongoing compliance can feel overwhelming, especially when you're trying to focus on patient care. Here's what you need to track:
Professional Corporations must file annual reports within 2.5 months after your fiscal year end using Form C-156A/S.18. Your report must include names and residential addresses of all shareholders, plus certification that all shareholders are duly licensed. Filing fees are $100.00 for electronic submission, $125.00 for timely paper submission, or $150.00 for late filing (with an additional $25.00 late fee).
Professional LLCs must file annual reports on or before the anniversary date of your original certificate filing. The fee is $500.00. Your report must include all information from your certificate of organization with any necessary updates.
All healthcare entities pay corporate excise tax under M.G.L. Chapter 63: 8.0% on Massachusetts net income and $2.60 per $1,000 of tangible property or net worth, with a $456 minimum. S Corporations file by the 15th day of the 3rd month after year end; C Corporations file by the 4th month. You'll need estimated tax payments if your expected excise tax exceeds $1,000.
Four laws passed between July 2024 and November 2025 have expanded your compliance requirements. S.2871 (effective July 18, 2024) created new licensing for office-based surgical centers and urgent care centers while enhancing oversight of private equity firms, REITs, and MSOs. H.5159 and Chapter 343 (effective January 8 and December 6, 2025) strengthened oversight of private equity involvement and increased data reporting requirements from pharmaceutical companies and pharmacy benefit managers. H.4706 (effective November 5, 2025) established mandatory licensing for home care agencies with ownership disclosures. Together, these laws increase your reporting obligations to the Health Policy Commission and Center for Health Information and Analysis, with stronger penalties for non-compliance.
Your medical license and entity compliance are interconnected. Here's how your licensing status affects your practice ownership:
You need to complete 50 CME credits every two years to maintain active licensure. The renewal cycle runs from January 1st of every even year to December 31st of the next odd year. The 50 total credits must include 10 credits in Risk Management and 2 credits reading Board Regulations (study of 243 CMR 1.00 through 3.00). Plus you'll need one-time requirements for topics like opioid education, implicit bias training, and EHR proficiency if you haven't completed them previously.
Note: While the codified regulation at 243 CMR 2.00 specifies 100 CME credits per licensing cycle, an effective January 1, 2018 CME Pilot Program revised this requirement to 50 credits biennially, which represents the current operational standard.
Submit your renewal by July 1st for a January 1st renewal date at $600 per two-year cycle. Your license expires at 11:59 P.M. on the renewal date if not renewed. You must apply to participate in MassHealth and maintain malpractice insurance as conditions of renewal.
You need an active license to own a professional healthcare entity. 243 CMR 2.00 establishes that valid, active license status is required for healthcare entity ownership. Suspended or inactive license status restricts or prohibits ownership or active participation.
You must report your ownership interest and percentage biennially during license renewal per 243 CMR 2.11. The Board expects transparency regarding your ownership interests. Failure to disclose can result in disciplinary action including fines, license suspension, or license revocation.
Here are the most common questions we hear from Massachusetts healthcare professionals:
No. Massachusetts enforces the Corporate Practice of Medicine doctrine through McMurdo v. Getter and 243 CMR 2.11, requiring physicians to hold majority ownership. Limited exceptions exist for medical service corporations under M.G.L. Chapter 176C, Section 2 (health insurance entities) and carefully structured MSOs that provide only administrative services without influencing medical decisions.
Your ownership rights end. Under 243 CMR 2.00, you need active licensure for healthcare entity ownership. Professional Corporations require all shareholders to be licensed professionals, and M.G.L. Chapter 156A, Section 10 voids unauthorized transfers. You must either restore your license or transfer ownership to qualified licensed professionals. Annual reports require licensing status certification.
Healthcare professional entities in Massachusetts face distinct annual compliance obligations. Professional Corporations must file annual reports within 2.5 months after their fiscal year end, with fees of $125 for timely filing, $100 for electronic filing, or $150 for late filing. Professional LLCs must file annual reports on or before the anniversary date of their original certificate, with a fixed annual fee of $500. Both entity types must certify all shareholders, members, or managers are duly licensed professionals.
The bottom line: Professional LLCs face significantly higher annual compliance costs. Over a two-year period, PLLC compliance costs total approximately $1,456 ($1,000 in annual reports plus $456 minimum tax), while PC compliance costs total approximately $656 ($200 in annual reports plus $456 minimum tax), representing an $800 difference in ongoing compliance expenses.
No. Massachusetts prohibits multi-discipline ownership. M.G.L. Chapter 156A, Section 10 limits professional corporation ownership to professionals licensed for the same service. The Corporate Practice of Medicine doctrine under 243 CMR 2.00 allows only licensed physicians and certain qualified nurse practitioners to own medical practices. Physician assistants cannot own practices due to supervision requirements under 263 CMR 5.04. Healthcare professionals from different disciplines must create separate entities with contractual relationships.
Four laws enacted between July 2024 and November 2025 expanded compliance obligations. S.2871 (July 18, 2024) established new licensing for surgical and urgent care centers with enhanced private equity oversight. H.5159 (January 8, 2025) and Chapter 343 (December 6, 2025) increased data reporting requirements and strengthened regulatory authority for the Health Policy Commission and Center for Health Information and Analysis. H.4706 (November 5, 2025) mandated home care agency licensing with ownership disclosures. These laws collectively increase reporting obligations and create enhanced penalties across healthcare sectors.
Managing compliance across multiple entities is overwhelming. Missing a single deadline can put your entity in jeopardy. Discern automates this complexity. Instead of spending hours tracking deadlines across spreadsheets, Discern monitors your compliance calendar and alerts you before deadlines.
Healthcare organizations in Massachusetts must navigate complex entity management requirements including registered agent designation, form filings with the Secretary of the Commonwealth, and compliance with Board of Registration in Medicine standards. Massachusetts General Laws require professional corporations and professional LLCs to maintain current registered agents, file annual reports certifying shareholder/member licensure status within specific deadlines, and comply with corporate excise tax obligations.
Ready to simplify your healthcare entity compliance? Book a demo with Discern today and see how we can reduce your administrative burden.
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