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The short version of a doctrine with its own wiki. For depth (friendly-PC structures, state rules, MSO agreements), go to the MSO-PC Wiki.

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The doctrine in one paragraph

Most states restrict who may own an entity that practices medicine or dentistry: licensed individuals, through professional entities. That’s corporate practice of medicine (CPOM), a mix of statutes, practice acts, AG opinions, and case law that varies by state. The rationale: clinical judgment should answer to clinicians, not shareholders. The consequence: your entity will almost certainly be a PC or PLLC owned by you and same-licensed co-owners.

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What it means day to day

Little, until it suddenly matters. The entity choice controls who can buy in (generally same-licensed professionals only), what happens to shares on death or license loss (forced transfer to a licensee), and how non-clinician capital can ever participate: not by owning the PC. That’s why the MSO structure exists. It also shapes the plumbing: the PC signs the payer contracts, owns the bank accounts, and its EIN and Type 2 NPI ride every claim.

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When the MSO question arrives

The PC keeps the clinical practice: licenses, payer contracts, clinical employees. The MSO owns everything else and serves the PC under a management services agreement for a fee. Decision framework: Scaling beyond one practice.

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The banking corollary

Money must respect the structure. Each entity’s revenue lands in its own accounts; funds cross entity lines only per the written agreements. Regulators evaluating whether a PC is genuinely independent look at who controls the accounts and how money actually moved.