If you're establishing a healthcare practice in North Carolina, you'll need to navigate one of the nation's strictest regulatory landscapes for entity management. North Carolina strictly enforces the Corporate Practice of Medicine doctrine, requiring licensed physicians to maintain complete control over medical practices. This doctrine, combined with dual regulatory oversight from both the NC Secretary of State and the NC Medical Board, creates compliance obligations that extend far beyond standard business formation.
You'll need to choose from three professional entity types: Professional Corporations (PCs) governed by N.C. Gen. Stat. Chapter 55B, Professional Limited Liability Companies (PLLCs) governed by N.C. Gen. Stat. Chapter 57D, Article 2, and Professional Associations (PAs), which are functionally identical to PCs under Chapter 55B. Each structure requires NC Medical Board certification before Secretary of State filing, with physicians maintaining active North Carolina medical licenses to qualify for ownership interests.
Professional Corporations (PCs)
When you form a Professional Corporation under N.C. Gen. Stat. Chapter 55B, you're creating an entity organized to render licensed professional services. Ownership and governance requirements under N.C. Gen. Stat. § 55B-4 mandate that at least one incorporator, one director, and one officer must be licensees. All shares must be owned exclusively by licensees, with N.C. Gen. Stat. § 55B-6 prohibiting any non-physician ownership in medical practices.
Your professional corporation requires NC Medical Board approval with a $50 application fee and $25 annual renewal fee. You must file with the NC Secretary of State within four months of receiving Board certification or restart the entire approval process.
Professional Limited Liability Companies (PLLCs)
Your Professional LLC under N.C. Gen. Stat. Chapter 57D, Article 2 combines limited liability protection with professional practice flexibility. Members and managers are not personally liable for malpractice of others within the PLLC (except their own misconduct). The NC Medical Board requires minimum two-thirds ownership by licensees, providing greater flexibility than PCs which require 100% physician ownership.
North Carolina strictly enforces the Corporate Practice of Medicine (CPOM) doctrine through multiple legal mechanisms. The NC Medical Board Position Statement 10.1.2 explicitly states that "business corporations cannot own medical practices or employ physicians to treat patients."
Statutory authority derives from N.C. Gen. Stat. § 55B-14, which limits ownership to licensed professionals. Management Services Organizations (MSOs) may provide administrative support but cannot influence clinical decisions. Limited exceptions exist only for hospitals, health systems, certain nonprofits, and government agencies.
When you're ready to form your healthcare entity, you'll need to navigate a two-phase approval process: Medical Board approval (approximately 4 months) followed by Secretary of State filing within 4 months.
Critical filing deadline: You must file with the Secretary of State within 4 months of receiving Medical Board approval or restart the entire process.
Your healthcare professional entity faces annual obligations including Medical Board renewal and privilege license tax payment. PCs also face franchise tax obligations.
Registered agent maintenance
Every professional entity must maintain a registered agent in North Carolina to receive service of process and official correspondence. Discern provides registered agent services across all jurisdictions, ensuring you never miss critical compliance deadlines.
Medical Board annual renewal
You must renew your Medical Board registration annually ($25 fee, $10 late fee if delinquent). Entities suspended for failure to renew face recertification fees plus penalties for each year unrenewed.
Annual report exemption
Professional entities are exempt from the $200 annual Secretary of State report that standard businesses must file under N.C. Gen. Stat. § 55-16-22 (PCs) and N.C. Gen. Stat. § 57D-2-24 (PLLCs).
Healthcare organizations expanding into North Carolina from other states must obtain both Medical Board approval and a Certificate of Authority from the Secretary of State ($250 fee) before providing services. Understanding foreign registration requirements prevents compliance gaps that could jeopardize your ability to practice.
Can a business corporation employ physicians in North Carolina? No. North Carolina strictly enforces the Corporate Practice of Medicine doctrine, prohibiting business corporations from employing physicians to treat patients. Medical practices must be owned entirely by persons holding active North Carolina medical licenses, with narrow exceptions for hospitals, health systems, and government agencies.
What happens if a physician-owner's license lapses? License inactivation automatically disqualifies you from maintaining entity ownership interests. You must divest ownership immediately. If your surname appears in the corporate name, your entity must amend its Articles of Incorporation per N.C. Gen. Stat. § 55B-5.
Are professional healthcare entities required to file annual reports? No. Professional corporations and PLLCs are explicitly exempt from Secretary of State annual report requirements. However, you must maintain your $25 annual Medical Board registration renewal and remain subject to the $50 annual privilege license tax (and franchise tax for PCs only).
What are the key differences between a PC and PLLC? Ownership: PCs require 100% licensed professional ownership; PLLCs require minimum two-thirds. Tax: PCs face franchise tax ($200 minimum annually); PLLCs avoid franchise tax through pass-through treatment. Both require $50 Medical Board fees and $125 formation filing fees.
Discern automates healthcare entity compliance, tracking Medical Board renewals, monitoring the critical 4-month post-approval filing deadline, and coordinating registered agent services across all jurisdictions. Our platform manages what used to take hours in just minutes.
Ready to eliminate compliance anxiety? Book a demo to see how Discern keeps your North Carolina healthcare entities in perfect standing.
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