Veterinary Medical Board Requirements
Understanding VMB requirements for professional corporation formation
Professional Corporation Mandate
California veterinarians must form professional corporations to practice as a legal entity. General corporations and LLCs are prohibited for veterinary practice.
- Professional corporation (PC) required
- LLC prohibited for veterinary practice
- Articles state professional purpose
- Name must include "Professional Corporation"
VMB Certificate of Registration
The Veterinary Medical Board must issue a Certificate of Registration before your professional corporation can practice veterinary medicine.
- Submit filed Articles of Incorporation
- List all shareholders with license numbers
- Provide corporate bylaws
- Pay registration fee ($325)
Moscone-Knox Act Compliance
Veterinary professional corporations are governed by the Moscone-Knox Professional Corporation Act (Corp Code § 13400-13410).
- One or more licensed DVMs required
- Professional purpose statement in Articles
- Annual VMB reporting requirements
- Name ending requirements apply
Multi-Location Operations
Veterinary PCs can operate multiple hospital locations, but each requires separate premises permits from the VMB.
- Separate permit per location
- Managing veterinarian at each site
- Individual facility inspections
- Location-specific compliance
Ownership & Share Structure Rules
Veterinary corporation ownership has more flexibility than many healthcare professions
🔑 Key Ownership Flexibility
Unlike many healthcare professions, California veterinary corporations can have non-veterinarian shareholders—but DVMs must maintain control:
- 51% DVM Ownership Required: Licensed veterinarians must own at least 51% of shares
- Non-DVM Shareholders Permitted: Up to 49% can be owned by non-veterinarians
- Board Control: DVMs must maintain majority control of the board of directors
- Practice Control: Non-DVMs cannot control veterinary medical decisions
Eligible DVM Shareholders
Veterinarians who can hold shares in the professional corporation:
- California-licensed DVMs (active status)
- Licensed RVTs (up to 49% combined with non-DVMs)
- Other veterinary PCs as shareholders
- Estates of deceased DVMs (limited time)
Non-DVM Shareholders
Non-veterinarians can own minority shares with restrictions:
- Maximum 49% ownership (combined)
- Cannot make veterinary decisions
- Cannot serve as managing veterinarian
- Practice managers and investors eligible
Common Ownership Structures
Typical veterinary PC ownership arrangements:
- Solo DVM: 100% ownership
- Multi-DVM partnership: Equal or custom splits
- DVM + spouse investor: 51%/49% split
- DVM + private equity: Maintain 51% minimum
Share Transfer Restrictions
Corporate documents must include transfer provisions:
- Mandatory redemption on license loss
- Death/disability buyout provisions
- Right of first refusal for remaining DVMs
- Maintain 51% DVM ownership requirement
⚠️ Corporate Practice of Veterinary Medicine
While ownership is flexible, veterinary medical decisions must remain with licensed veterinarians:
- Non-DVM shareholders cannot direct patient care
- Managing veterinarian must control medical operations
- Fee-splitting with non-DVMs requires careful structuring
- Violation can result in license discipline and corporate registration revocation
Formation Process & Timeline
Step-by-step guide to forming your California veterinary professional corporation
Choose & Reserve Corporate Name
Select a compliant name that meets both Secretary of State and VMB requirements. Name must indicate professional corporation status.
Draft & File Articles of Incorporation
Prepare professional corporation Articles with specific veterinary purpose language and file with California Secretary of State.
Prepare Corporate Documents
Create bylaws, shareholder agreements, and initial resolutions required for VMB registration and operations.
Apply for VMB Certificate of Registration
Submit application to Veterinary Medical Board with required documentation and fee.
Obtain EIN & Open Business Accounts
Get federal tax ID number and establish corporate banking and financial accounts.
Apply for Hospital Premises Permit
Submit premises permit application for each practice location before opening to patients.
Register with State & Local Agencies
Complete remaining registrations and obtain local permits for practice operation.
Hospital Premises Permits
VMB permit requirements for veterinary practice facilities
Veterinary Hospital Permit
Full-service facility with surgical capabilities and extended care:
- Surgery suite with anesthesia
- Inpatient hospitalization capability
- Diagnostic imaging (X-ray minimum)
- Laboratory facilities
Veterinary Clinic Permit
Basic practice facility for routine care and minor procedures:
- Examination rooms
- Basic laboratory capability
- Vaccination and wellness services
- Minor surgical procedures
Mobile Veterinary Facility
Vehicle-based practice with special permit requirements:
- Specific mobile unit registration
- Equipment specifications
- Fixed base location required
- Service area documentation
House Call Practice
No premises permit required for exclusive house call practice:
- No fixed patient care location
- Portable equipment standards
- Business address still required
- Medical records storage compliance
📋 Premises Permit Application Requirements
- Floor Plan: Detailed layout showing all rooms, equipment placement, and patient flow
- Equipment List: Comprehensive inventory of medical equipment and instruments
- Managing Veterinarian: Designated DVM responsible for facility compliance
- Facility Inspection: VMB inspector visit before permit issuance
- X-Ray Registration: California Department of Public Health registration for radiography
| Permit Type | Initial Fee | Renewal Fee | Key Requirements |
|---|---|---|---|
| Veterinary Hospital | $450 | $450/year | Full surgical & hospitalization capability |
| Veterinary Clinic | $450 | $450/year | Basic exam and treatment facility |
| Mobile Unit | $450 | $450/year | Vehicle registration + fixed base |
| Vaccination Clinic | $100 | $100/year | Limited to vaccination services only |
Specialty Practice Structures
Formation considerations for specialized veterinary practices
Emergency & Critical Care
24-hour emergency hospitals require additional infrastructure:
- Continuous veterinary coverage
- ICU and monitoring equipment
- Multiple staffing shifts
- Transfer arrangements with day practices
Equine & Large Animal
Practices focused on horses and livestock have unique needs:
- Ambulatory/field service capability
- Large animal facilities if hospital-based
- CDFA registration for food animals
- Interstate health certificates capability
Exotic & Avian Practice
Specialized equipment and expertise for non-traditional pets:
- Species-specific housing and handling
- Specialized diagnostic equipment
- USF&W permits if applicable
- Isolation protocols
Specialty Referral Center
Board-certified specialist practices:
- ABVS-recognized specialist(s)
- Advanced diagnostic imaging (CT, MRI)
- Referral relationships with GPs
- Fellowship training capability
Relief Veterinarian Arrangements
Structuring independent contractor and employee relationships
Independent Contractor Relief
Properly structured IC arrangements for coverage:
- Written independent contractor agreement
- Control over methods of work
- Relief vet maintains own liability insurance
- Per diem or hourly rate compensation
Associate Veterinarian Employees
W-2 employment relationships for regular staff:
- Employment agreement with terms
- Covered under practice liability insurance
- Benefits and payroll taxes
- Non-compete provisions (if permitted)
Path to Partnership
Structuring associate-to-owner transitions:
- Buy-in schedule and valuation method
- Vesting provisions for equity
- Practice valuation methodology
- Financing arrangements
⚠️ Worker Classification Compliance
California's AB5 law affects veterinary practice staffing:
- Relief veterinarians generally qualify as ICs under professional services exemption
- RVTs and support staff are typically employees, not ICs
- Misclassification can result in significant penalties
- Document IC status with proper agreements and business practices
Tax Planning & Entity Election
Optimizing your veterinary corporation's tax structure
S-Corporation Election
Most common election for veterinary PCs:
- Pass-through taxation avoids double tax
- Self-employment tax savings on distributions
- Reasonable salary requirement
- 100 shareholder limit (rarely an issue)
C-Corporation Status
May benefit practices with significant reinvestment:
- 21% flat federal corporate rate
- Retain earnings for expansion
- Double taxation on distributions
- More flexible fringe benefits
Retirement Planning
Tax-advantaged retirement options for veterinary PCs:
- 401(k) with employer matching
- Defined benefit pension plans
- Cash balance plans
- SEP-IRA or SIMPLE IRA options
Real Estate Strategies
Separating practice from real estate ownership:
- Separate LLC for property ownership
- Lease arrangements with practice PC
- Build equity outside practice value
- Estate planning benefits
| Factor | S-Corp | C-Corp |
|---|---|---|
| Federal Tax Rate | Individual rates (up to 37%) | 21% flat corporate rate |
| CA Tax Rate | 1.5% minimum + individual | 8.84% corporate |
| Self-Employment Tax | Only on salary, not distributions | N/A (employment taxes only) |
| Distributions | Tax-free if basis available | Taxed as dividends (double tax) |
| Best For | Most veterinary practices | High-growth, retaining earnings |
Frequently Asked Questions
Common questions about California veterinary corporation formation
Yes, California permits non-veterinarian ownership of up to 49% of a veterinary professional corporation. However, licensed DVMs must maintain at least 51% ownership and control of the corporation. Non-DVM shareholders cannot make veterinary medical decisions or serve as the managing veterinarian. This is more flexible than many other healthcare professions in California, which often require 100% licensed professional ownership.
No, California does not permit veterinarians to practice through an LLC. The Veterinary Medical Board only authorizes professional corporations for the corporate practice of veterinary medicine. Some states allow veterinary LLCs, but California requires the professional corporation structure with VMB registration.
A managing veterinarian is the licensed DVM designated as responsible for ensuring compliance with veterinary laws and regulations at a specific premises. Every veterinary premises permit requires a designated managing veterinarian. This person is responsible for the quality of veterinary services, supervision of staff, maintenance of medical records, and compliance with all VMB regulations. The managing veterinarian must be an employee or shareholder of the practice.
The complete process typically takes 4-8 weeks: Secretary of State filing (5-7 business days standard, or 24 hours expedited), VMB Certificate of Registration (2-4 weeks), and premises permit (2-4 weeks including inspection). If you already have a location ready, you can work on these simultaneously. The premises permit often takes the longest due to inspection scheduling.
No, if you exclusively provide veterinary services at clients' locations (house calls only) and do not maintain any fixed location where patients are examined or treated, you do not need a premises permit. However, you must still form a professional corporation, obtain VMB registration, and comply with all other veterinary practice requirements including medical records storage and controlled substance regulations.
Yes, veterinary professional corporations can employ RVTs, and RVTs can also be shareholders (counting toward the non-DVM 49% maximum). RVTs must work under the direct or indirect supervision of a licensed veterinarian and can only perform tasks within their scope of practice. Proper supervision protocols must be established and documented.
Your corporate documents must include mandatory redemption provisions requiring the corporation to buy back shares from any shareholder who loses their DVM license. The redemption must occur within a reasonable time (typically 90 days). If this would cause DVM ownership to fall below 51%, the corporation must take immediate steps to restore compliance, which may include bringing in new DVM shareholders or dissolving the corporation.
Yes, a single veterinary professional corporation can operate multiple premises, but each location requires its own premises permit from the VMB and must have a designated managing veterinarian. Each location is inspected separately and must independently meet all facility requirements. Many multi-location practices operate this way rather than forming separate corporations for each location.