California offers growing independence for Nurse Practitioners (NPs), especially after the implementation of AB 890. However, many NPs find themselves confused—or even misled—when it comes to one of the most fundamental questions in practice formation: Can a nurse practitioner fully own their own practice in California?

The answer is yes. But the structure matters. This article provides a technical and practical breakdown of how full NP ownership works under California law.

The Key Distinction: Nursing Corporation vs. Medical Corporation

In California, healthcare entities must be formed as professional corporations (PCs) when providing professional services. However, what kind of professional corporation you create—and the license type of the shareholders—directly determines who can own the entity.

Nurse Practitioner-Owned Professional Nursing Corporations

NPs can fully own their practice if they form a Nursing Corporation.

Under California Business and Professions Code § 2775, a nursing corporation is a specific type of professional corporation authorized to render services within the scope of registered nursing:

Cal. Bus. & Prof. Code 2775 "[a] nursing corporation is a corporation which is authorized to render professional services, as defined in Section 13401 of the Corporations Code, so long as that corporation and its shareholders, officers, directors, and employees rendering professional services who are registered nurses are in compliance with the Moscone-Knox Professional Corporation Act, the provisions of this article and all other statutes and regulations now or hereafter enacted or adopted pertaining to such corporation and the conduct of its affairs." Accordingly, providing the statutory basis for a 100% NP owned practice.

This statute explicitly supports 100% ownership by NPs, assuming all parties involved in rendering services (owners, officers, directors) are appropriately licensed. And this setup has been vetted and used across a vast number of California-based NP practices.

Medical Corporations Require Physician Ownership

Challenges arise when NPs are mistakenly advised to form a professional corporation under the board of medicine instead. While this is a valid structure, it does require a physician to own at least 51% of the corporation.

This is because in California, medical corporations fall under different ownership rules. According to California Corporations Code § 13401.5(a):

For a Medical Professional Corporation, the relevant law provides that, "[v]arious licensed health care professionals (physicians, nurses, social workers, PAs, etc.) may be shareholders of a medical PC as long as 51% of the shares of the medical PC are owned by licensed physicians or surgeons and the number of non-physician shareholders does not exceed the number of physician shareholders. Cal. Corp. Code § 13401.5(a), emphasis added; see also Cal. Corp. Code § 13401(d) (defining "licensed person" as a natural person licensed under California's Business and Professions code). As such, for a Medical PC, it is true that another option in structuring a PC is with a non-physician professional (like an NP) co-owning a Medical PC, so long as the physician holds 51% of the shares.

Bottom line: If your professional corporation is formed as a medical practice, then a physician must own at least 51% of the entity. NPs can only be minority owners in this structure.

This explains the conflicting guidance that some NPs receive. It's not that NPs can't own a practice—it's that the ownership rules depend entirely on the type of PC they establish.

Common Misconceptions

1. "I need a physician to co-own my practice." Not true—if you structure it as a nursing corporation

2. "The collaboration agreement proves physician ownership." Incorrect. A collaboration agreement is a clinical supervision requirement, not an ownership document. It is still necessary for NPs who are not "104 NPs" per AB 890, but unrelated to corporate ownership.

3. "All healthcare practices in California must be medical PCs." False. California law allows different types of PCs depending on the professional license of the shareholders.

Do You Still Need a Physician?

Yes—but not for ownership. Until you reach 104 full practice authority as defined by AB 890, California requires that NPs have either a collaborating or supervising physician, depending on the regulatory pathway you follow.

That physician relationship is clinical—not corporate—and can be established via a formal collaboration agreement, regardless of your ownership structure.

Conclusion: Own It—The Right Way

Nurse Practitioners in California can and do fully own their practices. The key is forming a Nursing Corporation, not a Medical Corporation.

At Prax Health, we're here to make this process simple and compliant, and we partner with the number one leading healthcare legal group in the US to ensure everything is done right from day one.