Managing healthcare entity compliance in Virginia creates immediate complexity that catches many practice administrators off guard. You're tracking physician license renewals that vary by birth month in even-numbered years, annual entity reports due by incorporation month, and ensuring every owner maintains an active professional license, because if even one physician's license lapses, their ownership eligibility vanishes instantly. This dual regulatory oversight between the Virginia State Corporation Commission (handling business entity matters) and the Virginia Department of Health Professions (overseeing professional licensing) means you're never tracking just one deadline. Miss a filing, and you face late penalties; miss a license renewal, and your entity ownership structure may suddenly violate Virginia law.
The Commonwealth enforces an implicit Corporate Practice of Medicine doctrine through statutory ownership restrictions. Organizations must ensure that all owners maintain active professional licenses throughout the entity's operation.
Virginia recognizes three distinct professional entity types for healthcare organizations: Professional Corporations (PCs) under Virginia Code Title 13.1, Chapter 7, Professional Limited Liability Companies (PLLCs) under Title 13.1, Chapter 11, and Registered Limited Liability Partnerships (LLPs) under Virginia Code Title 50, Chapter 2.2, Article 9.1. Each structure carries specific formation requirements, ongoing compliance obligations, and statutory restrictions that healthcare compliance professionals must understand to maintain good standing with Virginia regulatory authorities.
Virginia's Professional Corporations Act (Virginia Code Title 13.1, Chapter 7) establishes the legal framework for physician-owned medical practices. Under Virginia Code § 13.1-543, Professional Corporations must be "organized for the sole and specific purpose of rendering professional services" and may only be formed by individuals "duly licensed or legally authorized" to provide those services in Virginia.
Healthcare professionals eligible to form PCs include practitioners of the healing arts licensed under Chapter 29 of Title 54.1—physicians, advanced practice registered nurses, optometrists, physical therapists, behavioral science professionals, and audiologists. Only licensed professionals in the same field may serve as shareholders, with limited exceptions for employee stock ownership plans.
The Virginia Professional Limited Liability Company Act (Title 13.1, Chapter 11) provides healthcare professionals with an alternative entity structure combining liability protection with operational flexibility. According to Virginia Code § 13.1-1102, PLLCs may only be formed by individuals "licensed or legally authorized in Virginia to provide professional services," with all members holding valid licenses to render the same professional service as the PLLC's stated purpose.
The Virginia State Corporation Commission does not require proof of professional licensure at the time of formation, though members must comply with all licensing board requirements under Title 54.1 throughout the entity's operation.
Virginia Code § 50-73.132 establishes registration requirements for healthcare partnerships seeking limited liability status. All partners must be "duly licensed or legally authorized to render the same professional services" as the partnership's stated purpose. LLPs must file annual continuation reports by July 1 under Virginia Code § 50-73.134, with failure resulting in automatic cancellation of LLP status.
Virginia enforces an implicit Corporate Practice of Medicine doctrine through statutory prohibitions and judicial precedent. Virginia Code § 54.1-2902 makes it unlawful for "any person, partnership, corporation, or other entity to practice medicine without a valid license," explicitly extending licensing requirements to corporate entities and establishing that lay corporations cannot practice medicine.
The Virginia Supreme Court's decision in Family Care Center, Inc. v. Nipun Parikh, M.D. (2007) confirms that non-professional corporations cannot lawfully engage in medical practice. Healthcare organizations can comply through physician-owned Professional Corporations or PLLCs, Management Service Organizations providing administrative services while preserving physician clinical autonomy, or hospital employment with physician control over medical judgment.
Before you file formation documents, understanding fee structures and processing timelines prevents costly surprises. The Virginia State Corporation Commission maintains sole authority over entity formation. Healthcare organizations should carefully review fee structures and processing timelines when selecting entity types. Professional Limited Liability Companies require a $100 filing fee with $50 annual registration fees, while Professional Corporations involve a $25 base filing fee plus variable annual registration fees ($25-$1,700) depending on authorized shares. The SCC offers expedited processing services for online filings: same-day service for $200 or next-day service for $50-$100. Importantly, no approval from the Virginia Board of Medicine or other health professions boards is required before or after formation, though all members must maintain active professional licenses in their respective fields.
According to the Virginia SCC's Annual Registration Fee Schedule, stock-based Professional Corporations face variable annual costs based on authorized shares: $100 for 1-5,000 shares, $125 for 5,001-10,000 shares, $175 for 10,001-25,000 shares, $250 for 25,001-50,000 shares, $350 for 50,001-100,000 shares, $850 for 100,001-250,000 shares, $900 for 250,001-270,000 shares, and $1,700 for entities exceeding 270,000 shares. In contrast, PLLCs maintain a flat annual registration fee of $50. For practices authorizing fewer than 100,000 shares, the cost difference between PCs and PLLCs is modest, but practices with substantial authorized share counts may find PLLCs offer more predictable compliance costs.
Naming requirements differ significantly between entity types. Professional Corporations may use either standard corporate designators ("Corporation," "Incorporated," "Company," or "Limited") or professional-specific designators ("PC," "P.C.," "Professional Corporation"), according to Virginia Code § 13.1-544.1. PLLCs face mandatory dual-designator requirements under Virginia Code § 13.1-1104, requiring both an LLC designator ("limited liability company," "LLC," "L.L.C.") and a professional designator ("PLLC," "P.L.L.C.," "professional limited liability company") at the end of the name.
Virginia Code § 54.1-2903 prohibits using "any title, word, letter, or designation that implies the ability to heal or practice medicine" without proper licensure, while 18 VAC 85-20-30 prohibits advertising that is "false, misleading, or deceptive." Healthcare entities may use medical specialty terms in their names if members hold appropriate Virginia licenses for those specialties and the name accurately represents the scope of services licensed members can legally provide.
After formation, your compliance calendar begins immediately. Virginia healthcare professional entities must file annual reports and pay annual registration fees by the last day of their incorporation month. According to the Virginia State Corporation Commission's Annual Reports FAQ, all corporations (including PLLCs and PCs) must file annual reports starting the year after incorporation.
Annual reports verify current directors, officers, and principal office addresses. The Commonwealth charges no fee for filing the annual report itself. However, annual registration fees are required: $50 for PLLCs and $25 for nonstock Professional Corporations, with stock-based PCs paying $100 to $1,700 annually based on authorized shares. Late payment penalties include a $25 flat fee for PLLCs and 10% of the fee (or $10, whichever is higher) for PCs.
Entities face strict deadlines based on their incorporation month. A practice incorporated in March must file by March 31st; an October incorporation requires filing by October 31st. Virginia provides a five-month grace period before terminating entities for non-filing, though the deadline itself is fixed with no extensions available. Entity management platforms can centralize these varying deadlines across multiple entities, ensuring timely compliance regardless of incorporation month. Virginia doesn't impose a separate "franchise tax" on PLLCs or Professional Corporations—these charges are properly termed annual registration fees.
No legislative changes affected annual compliance requirements, reports, or registration fees for healthcare professional entities between 2023 and 2026. This stability provides healthcare organizations with predictable compliance obligations, though administrators must remain vigilant for future legislative developments that could alter filing requirements or fee structures.
Entity compliance means nothing if your physician-owners lose licensing eligibility. The Virginia Board of Medicine requires physicians to complete 60 hours of Type 1 continuing learning activities during each biennial renewal period under 18VAC85-20-235. Type 1 activities must be approved by the Liaison Committee for Continuing Medical Education of the American Medical Association and Association of American Medical Colleges, the Accreditation Council for Continuing Medical Education, the American Osteopathic Association, or the American Podiatric Medical Association. All physicians (MD, DO, and DPM) follow the same 60-hour biennial requirement regardless of medical specialty.
Licenses renew on a biennial cycle in even-numbered years during the physician's birth month. A physician born in March must renew in March 2024, March 2026, and subsequent even-numbered years, while a physician born in September must renew in September 2024, September 2026, and beyond. The renewal fee is $337 for medicine, osteopathic medicine, and podiatry licenses under 18VAC85-20-22. You need systems that track both entity filing deadlines and individual license renewal dates to catch ownership eligibility issues before they create legal problems.
License status directly affects entity ownership eligibility. Virginia Code Title 13.1, Chapter 7 requires Professional Corporation shareholders to be individuals who are "duly licensed or legally authorized to render the same professional services as the corporation," while the Virginia Professional Limited Liability Company Act imposes identical requirements on PLLC members. The "duly licensed" statutory language necessarily implies an active license in good standing authorizing medical practice.
18VAC85-50-58 confirms that physicians holding inactive licenses are not entitled to practice medicine or perform any act requiring a medical license in Virginia. Therefore, physicians with inactive licenses do not qualify as "duly licensed or legally authorized to render" medical services and are ineligible to serve as shareholders in Professional Corporations or members of PLLCs. Loss of active license status through failure to renew, voluntary inactivation, or disciplinary action immediately disqualifies physicians from entity ownership under Virginia law.
Virginia permits multi-discipline ownership of healthcare professional entities. According to the Virginia State Corporation Commission's Professional LLC FAQs, PLLCs organized for healthcare services "may have members from multiple disciplines" within licensed healthcare professions, provided all members maintain appropriate licensure. Different licensed healthcare professionals (physicians, nurse practitioners, physician assistants) can co-own PLLCs and PCs together, with no statutory restrictions on ownership percentages or management control distribution between disciplines. The overarching principle requires that all owners maintain appropriate professional licensure for services provided by the entity.
Can non-physician entities employ physicians or own medical practices in Virginia?
No. Virginia enforces an implicit Corporate Practice of Medicine doctrine through Virginia Code § 54.1-2902 and binding precedent from Family Care Center, Inc. v. Nipun Parikh, M.D. (2007). Non-professional corporations cannot lawfully engage in medical practice. Permissible structures include physician-owned Professional Corporations under Virginia Code Title 13.1, Chapter 7, Management Service Organizations providing administrative services while preserving physician clinical autonomy, and hospital employment with physician control over medical judgment.
If a physician owner's license lapses or becomes inactive, what happens to their ownership eligibility?
If a physician owner's license lapses or becomes inactive, they would be disqualified from serving as a shareholder in a professional corporation or member of a professional limited liability company. Virginia law requires owners to be "duly licensed or legally authorized to render the same professional services." Once a license becomes inactive through failure to renew, voluntary inactivation, or disciplinary action, the physician no longer satisfies ownership requirements.
Loss of active license status would disqualify physicians from ownership eligibility. 18VAC85-50-58 confirms that inactive licensees cannot practice medicine in Virginia, meaning they no longer satisfy the "duly licensed or legally authorized to render" requirement in Virginia Code Title 13.1, Chapter 7 and the Virginia Professional Limited Liability Company Act. Healthcare entities must implement ownership transfer procedures or license reinstatement processes to maintain compliance when physician owners face license status changes.
What are Virginia's annual filing requirements for healthcare professional entities?
All healthcare professional entities must file annual reports and pay annual registration fees by the last day of their incorporation month. According to the Virginia State Corporation Commission, there is no fee for filing the annual report itself, but registration fees apply: $50 for PLLCs and $25 for PCs. Virginia provides a five-month grace period before terminating entities for non-filing, though deadlines are fixed with no extensions available.
Should healthcare practices choose Professional Corporations or PLLCs?
Your choice depends on whether you prioritize cost predictability or share structure flexibility. PLLCs offer predictable costs with a $100 formation fee and $50 annual registration fee. Professional Corporations have a $25 base filing fee but variable annual costs from $100 to $1,700 based on authorized shares according to the Annual Registration Fee Schedule. For most healthcare practices seeking cost predictability, PLLCs provide clearer financial planning advantages. Both entity types offer comparable liability protection and permit multi-discipline ownership under Virginia law.
Does the Virginia Board of Medicine require approval before forming a healthcare entity?
No. The Virginia State Corporation Commission has sole authority over entity formation, with no requirement for licensing board approval or notification when physicians form Professional Corporations or PLLCs. Neither Form SCC544 (Articles of Incorporation) nor Form LLC1103 (Articles of Organization) requires pre-filing certificates from the Board of Medicine. The SCC verifies that incorporators and organizers hold active licenses during the formation process, eliminating the need for separate board certification.
Managing Virginia's dual regulatory oversight means you're tracking physician license renewals by birth month in even-numbered years, annual entity reports due by incorporation month, and ensuring all owners maintain active licenses—because one lapsed license disqualifies that physician from ownership. For practices managing multiple entities or multi-state operations, this complexity multiplies exponentially.
Discern eliminates this uncertainty with automation designed specifically for healthcare organizations. Our platform completes most filings in under 3 minutes, manages registered agent services across all Virginia entities from a single dashboard, and provides real-time alerts when physician license renewals approach—so you're never surprised by an expiring credential that threatens ownership eligibility.
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 Virginia entities stay in good standing.
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