Managing healthcare entity compliance in Rhode Island requires coordinating business entity compliance through the Secretary of State and professional licensing compliance through the Department of Health. Rhode Island enforces some of the strictest healthcare entity regulations in the country.
Under R.I. Gen. Laws § 7-5.1-3, all shareholders, officers, and directors must maintain active licensure and work actively for the corporation. If you let your license lapse, including through failure to complete continuing medical education requirements, you immediately lose ownership eligibility and must divest your shares. Rhode Island also implemented a Pre-Merger Notification Rule effective January 28, 2026, requiring 60-day advance notice to the Attorney General for transactions involving medical-practice groups.
Rhode Island recognizes four professional entity types. Professional Service Corporations are governed under R.I. Gen. Laws Title 7, Chapter 5.1, while Professional Limited Liability Companies operate under the general LLC framework with professional service provisions in R.I. Gen. Laws § 7-16-3.1. Professional Associations operate under the identical statutory framework as PCs, and Limited Liability Partnerships are authorized under R.I. Gen. Laws Title 7, Chapter 12.1.
Rhode Island's professional entity statute covers a broad range of licensed professions. For healthcare organizations, the key structures are Professional Service Corporations and Professional Limited Liability Companies, each with distinct formation requirements and regulatory considerations.
PCs represent Rhode Island's primary statutory vehicle for healthcare practice ownership under R.I. Gen. Laws Title 7, Chapter 5.1. Section 7-5.1-2 enumerates the following healthcare professions regulated by the Department of Health: physicians, dentists, chiropractors, podiatrists, registered nurses, optometrists, physical therapists, opticians, physician assistants, midwives, and nurse-midwives.
Under § 7-5.1-3, every officer, director, and shareholder must be licensed and actively employed. Passive ownership is prohibited. Section 7-5.1-5 requires immediate share transfer or redemption when shareholders lose eligibility.
PLLCs operate under Rhode Island's general LLC statute with professional service provisions in § 7-16-3.1. Section 7-16-3.2 establishes personal liability for malpractice while providing limited liability for other business obligations.
Rhode Island lacks comprehensive PLLC provisions equivalent to PCs. Verify directly with the Rhode Island Secretary of State at (401) 222-3040 before selecting the PLLC structure.
Rhode Island enforces the Corporate Practice of Medicine doctrine through § 7-5.1-3, creating an absolute prohibition on non-physician ownership. Hospitals, private equity firms, and investment companies cannot directly employ physicians or own medical practices.
Compliant relationships can be structured through the "Friendly PC Model." A physician-owned PC retains exclusive clinical control while a Management Services Organization provides non-clinical administrative services. All MSO arrangements require 60-day notice to the Rhode Island Attorney General under the January 28, 2026 Pre-Merger Notification Rule.
You must obtain prior written approval from your licensing board before filing formation documents with the Secretary of State.
Rhode Island professional entities face several recurring obligations beyond formation. Missing any of these deadlines can trigger penalties, revocation, or loss of good standing.
Every professional entity must maintain a registered agent with a Rhode Island address. Discern provides registered agent services across all jurisdictions, ensuring continuous compliance.
PCs must file annual reports with the Secretary of State between January 1 and March 1 using Form 630 ($52.50 online). Reports filed after April 1 incur a $25 late penalty. PLLCs file between February 1 and May 1 using Form 632 ($52.50 online), with a $25 late penalty for reports filed after May 31. PCs must also pay Rhode Island's 7% corporate income tax with a $400 minimum regardless of profitability.
The Rhode Island Attorney General Pre-Merger Notification Rule became effective January 28, 2026, requiring 60-day advance notice for transactions involving material changes in ownership or control of medical-practice groups, including acquisitions by private equity and MSO formations.
The Rhode Island Department of Health regulates physician licensing. Your licensure status directly determines ownership eligibility under R.I. Gen. Laws § 7-5.1-5.
Physicians must complete 40 hours of CME per two-year renewal cycle (AMA Category 1 or AOA Category 1a credits). For the 2024 renewal cycle, the Rhode Island Board of Medical Licensure and Discipline requires 40 hours of ACCME-accredited training in any topic areas; specific topic requirements vary by renewal cycle and should be confirmed with the Board. CME credits must be earned on or before June 1 of even-numbered years. Licenses expire on July 1 of even-numbered years.
If you fail to meet CME requirements, your license lapses, triggering mandatory ownership divestiture under § 7-5.1-5. CME compliance is a business ownership prerequisite, not merely a professional obligation.
Healthcare organizations expanding into Rhode Island from other states must understand foreign registration requirements and CPOM restrictions before operating.
Rhode Island explicitly authorizes multi-discipline healthcare entities under R.I. Gen. Laws § 7-5.1-3(b). The eleven DOH-regulated healthcare professions (physicians, dentists, chiropractors, podiatrists, registered nurses, optometrists, physical therapists, opticians, physician assistants, midwives, and nurse-midwives) may co-own entities, but all owners must be licensed and actively employed by the corporation. License lapse by any shareholder triggers mandatory divestiture regardless of other shareholders' compliance.
Rhode Island's dual regulatory framework demands constant attention to both business entity status and professional licensing compliance. Coordinating Secretary of State filings, the 7% corporate income tax with $400 minimum, professional board approvals, and CME monitoring creates a significant administrative burden.
Discern automates annual report filings, tracks compliance deadlines, and provides registered agent services across all jurisdictions. Ready to simplify your healthcare entity compliance? Book a demo with Discern today.
No. Rhode Island enforces CPOM through R.I. Gen. Laws § 7-5.1-3. Compliant relationships use the "Friendly PC Model" where a physician-owned PC employs all physicians while an MSO provides non-clinical services. All MSO arrangements require 60-day notice to the Attorney General under the January 28, 2026 Pre-Merger Notification Rule.
If you fail to meet Rhode Island's CME requirements (40 hours per two-year cycle), your license lapses, triggering automatic loss of ownership eligibility. Under R.I. Gen. Laws § 7-5.1-5, you must immediately transfer shares to an eligible person or offer them for redemption at fair market value.
PCs must file annual reports between January 1 and March 1 using Form 630 ($52.50 online). PLLCs file between February 1 and May 1 using Form 632 ($52.50 online). Late filing incurs a $25 penalty (after April 1 for PCs; after May 31 for PLLCs). PCs must also file Rhode Island corporate income tax returns and pay the 7% tax with a $400 minimum regardless of profitability.
Yes. Rhode Island explicitly permits multi-discipline ownership under R.I. Gen. Laws § 7-5.1-3(b). Eleven DOH-regulated professions may co-own entities: physicians, dentists, chiropractors, podiatrists, registered nurses, optometrists, physical therapists, opticians, physician assistants, midwives, and nurse-midwives. All must be licensed and actively employed.
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