Psychological Corporation
3 Steps to Starting Your Psychological Corporation
Why Psychologists Must Form a Professional Corporation in California
If you’re a licensed psychologist in California, you are not permitted to form an LLC or a traditional general corporation for your psychology practice.
Under the Moscone-Knox Professional Corporation Act (California Corporations Code §§13400–13410), licensed psychologists are required to form a Psychology Professional Corporation to legally operate their practice.
Filing incorrectly can result in rejection by the Secretary of State, potential penalties from government agencies, and even disciplinary action from the California Board of Psychology.
At All-in-Juan Business Consultancy Services, we’ve helped thousands of California professionals, including psychologists, form their Professional Corporations correctly and in full compliance with state regulations.
📩 Email: [email protected]
What Is a Psychology Professional Corporation?
A Psychology Professional Corporation is a business entity registered with the California Secretary of State and certified by the California Board of Psychology.
It allows licensed psychologists to provide professional services while maintaining compliance with California law and enjoying key advantages such as liability protection, tax efficiency, and enhanced business credibility.
All Professional Corporations in California operate under the Moscone-Knox Act, which governs the ownership, naming, and professional structure of licensed practices.
Why Elect S-Corporation Status
By default, a Professional Corporation is taxed as a C-Corporation, which may lead to double taxation. Electing to be taxed as an S-Corporation allows you to:
✅ Avoid double taxation through pass-through income
✅ Reduce self-employment taxes
✅ Simplify payroll and compliance
✅ Maintain greater control over profits
3 Steps to Forming a Psychology Professional Corporation in California
Step 1: File the Articles of Incorporation
Prepare and submit your Articles of Incorporation for a Professional Corporation to the California Secretary of State, specifying that your business is organized under the Moscone-Knox Act for psychological services.
Step 2: Complete the Required Registrations
Once your corporation is formed, you must:
Apply for your EIN from the IRS
Appoint Directors
Draft your corporate bylaws
File your Statement of Information with the Secretary of State
File Form 2553 to elect S-Corporation tax status
Pay annual taxes to the California Franchise Tax Board (FTB)
Register with the Employment Development Department (EDD) if you pay salaries
Apply for local business licenses or permits
Step 3: Let All-in-Juan Handle the Entire Process
We take care of every step — from filing to compliance — ensuring your Psychology Professional Corporation is set up legally, accurately, and fast.
📩 Email: [email protected]
Benefits of a Psychology Professional Corporation
Forming your Psychology Corporation provides several advantages:
✅ Limited Personal Liability – Protects your personal assets from business debts and lawsuits.
✅ Tax Efficiency – Elect S-Corporation status to reduce self-employment taxes.
✅ Professional Credibility – Operate legally under California’s Moscone-Knox Act.
✅ Growth Potential – Build business credit and scale your practice.
Naming Requirements for a Psychology Professional Corporation
Your corporation’s name must include one of the following professional terms:
“Psychology”
“Psychological”
“Psychologist”
“Psychology Consultation”
“Psychology Consultant”
“Psychometry”
“Psychometrics”
“Psychotherapist”
“Psychoanalysis”
It must also include a corporate suffix such as:
“A Professional Corporation”
“Professional Corporation”
“APC” or “A.P.C.”
“PC” or “P.C.”
“Prof. Corp.”
“Inc.” or “Incorporated”
“Corporation” or “A California Professional Corporation”
❌ The abbreviation “LLC” is not permitted, as psychologists cannot form LLCs in California.
Who Can Be a Shareholder in a Psychology Professional Corporation
Ownership of a Psychology Professional Corporation is limited to licensed professionals.
At least 51% of the shares must be owned by licensed psychologists.
The remaining 49% may be owned by other California-licensed professionals, such as:
Physicians and Surgeons
Doctors of Podiatric Medicine
Registered Nurses
Optometrists
Marriage and Family Therapists
Clinical Social Workers
Chiropractors
Acupuncturists
Naturopathic Doctors
Professional Clinical Counselors
Licensed Midwives
However, non-psychologist shareholders cannot collectively own more than 49% of the total shares.
If a shareholder becomes ineligible or disqualified, they must transfer their shares to a qualified professional within 90 days to maintain compliance.
Can a Psychology Professional Corporation Be an LLC in California?
No.
California law does not permit psychologists to operate under an LLC (Limited Liability Company).
To practice psychology in California, you must form a Professional Corporation registered with the Secretary of State and the California Board of Psychology.
Can a Psychology Corporation Use a DBA or Fictitious Name?
Yes, a Psychology Professional Corporation may use a fictitious business name (DBA), as long as:
The name is not deceptive or misleading, and
A Fictitious Business Name Statement is filed within 40 days of starting the corporation,
The fictitious name is filed in every county where services are provided.
Start Your Psychology Corporation the Right Way
At All-in-Juan Business Consultancy Services, we make forming your Psychology Professional Corporation simple, compliant, and stress-free.
We’ve helped thousands of California professionals — including psychologists — legally establish their corporations under the Moscone-Knox Act. Let us do the same for you.
📞 Contact Number: +1 424 407-3686
📩 Email: [email protected]
🌐 Website: www.all-in-juanbusinessconsultancyservices.com
All-in-Juan Business Consultancy Services — Helping California’s licensed professionals form, protect, and grow their practices with confidence.
