Opening a medical spa in California means opening a medical practice. Botox, laser hair removal, and chemical peels are the practice of medicine under state law, so the business must be a physician-owned professional medical corporation, licensed through the Medical Board, and staffed under strict supervision rules. Skip a step and you risk fines up to $10,000, criminal charges for the unlicensed practice of medicine, or revocation of your medical director’s license.
Here is what the launch actually requires, in the order it matters.
Who Is Allowed to Own the Business
California’s Corporate Practice of Medicine doctrine blocks non-physicians from owning or controlling a medical practice. A medical spa has to be organized as a professional medical corporation, and a licensed physician must hold real authority over clinical decisions.
Share ownership is tightly limited. Under California Corporations Code Section 13401.5, certain other licensed healthcare professionals — registered nurses, physician assistants, psychologists, chiropractors, and licensed acupuncturists, among others — may hold shares, but the non-physician licensees together cannot exceed 49 percent of issued shares, and the number of non-physician shareholders cannot exceed the number of physician shareholders.1California Legislative Information. California Corporations Code 13401.5 A licensed physician must therefore hold at least 51 percent. Unlicensed individuals and ordinary business entities cannot hold any equity.
California Business and Professions Code Section 2408 adds that every shareholder, director, and officer of a medical corporation (except an assistant secretary or assistant treasurer) must be a licensed person as defined by the Corporations Code.2California Legislative Information. California Code, Business and Professions Code – BPC 2408 You cannot install a physician as a figurehead. The doctor must actually serve on the board and run the medicine.
BPC Section 2052 makes the stakes concrete. Practicing medicine without proper licensure, or conspiring with or aiding someone who does, is punishable by a fine up to $10,000, up to one year in county jail, or both.3California Legislative Information. California Code, Business and Professions Code – BPC 2052 Physicians who front for a non-physician owner face license revocation. Regulators know these arrangements exist and investigate them.
If You Are Not a Physician: The MSO Model
Non-physicians who want to participate in the business typically form a Management Services Organization, a separate LLC or standard corporation that contracts with the professional medical corporation under a Management Services Agreement.
The MSO can handle billing, marketing, HR, scheduling, office administration, and equipment procurement. It cannot make medical decisions, control clinical operations, set treatment protocols, or influence patient care. The professional medical corporation keeps exclusive authority over everything clinical.
Most compliance trouble lives in the MSA itself. Management fees have to reflect fair market value for the administrative services actually delivered. Tying the MSO’s fee to a percentage of medical revenue looks like illegal fee-splitting and is one of the fastest routes to an enforcement action. Flat monthly fees or fees tied to specific deliverables are the safer structures. Have a healthcare attorney review the agreement before signing, because it is the document regulators look at first.
Forming the Professional Medical Corporation
The founding filing is the Articles of Incorporation for a Professional Corporation, submitted to the California Secretary of State. The articles must include a purpose statement declaring that the corporation exists to practice medicine, satisfying the Moscone-Knox Professional Corporations Act.4Secretary of State. Forms – Section: Stock Corporations Initial Filings A generic purpose clause will be rejected.
Run a preliminary name search through the Secretary of State’s online database before drafting. The name should reflect the medical nature of the business; something that sounds like a day spa can create problems during Medical Board licensing. You will also need to name an initial registered agent for service of process in California, and name initial directors who meet the licensure requirements already described. Bylaws, kept as a separate internal document, should cover director qualifications, vacancies, meetings, and the standard of care directors owe the corporation.
Filings go through the bizfile California online portal, by mail, or in person in Sacramento. The base fee for Articles of Incorporation is $100.5California Secretary of State. Business Entities Fee Schedule Expedited processing is available: $350 for 24-hour, $750 for same-day, or $500 for four-hour service on pre-cleared documents dropped off in Sacramento.6California Secretary of State. Service Options Standard processing times fluctuate; as of early 2026, the Secretary of State’s office shows online formation filings running weeks behind submission.7California Secretary of State. Current Processing Dates Budget for expedited service if your opening date is fixed.
Once approved, you will receive a file-stamped copy of the Articles, which you need for a business bank account and for Medical Board permits. After incorporation, you must also file a Statement of Information with the Secretary of State. Letting it lapse brings Franchise Tax Board penalties and eventual suspension or forfeiture of the corporation.8California Secretary of State. Statements of Information Filing Tips A Certificate of Status proving the entity is active costs $5 through bizfile.9California Secretary of State. Business Entities Records Order Form
Fictitious Name Permit From the Medical Board
If the spa will operate under any name other than the physician-owner’s own name, and almost all do, you need a Fictitious Name Permit from the Medical Board of California. Under BPC Section 2285, using a fictitious, false, or assumed name without this permit is unprofessional conduct.10California Legislative Information. California Code BPC 2285 The permit ties the business name to the physician’s license in public records.
The application fee is $70, and the permit must be renewed every two years.11Medical Board of California. Fictitious Name Permit You can only apply once the professional medical corporation exists, so build that sequencing into your launch timeline.
Who Can Treat Patients, and Under Whose Supervision
Scope of practice is the operational question that generates the most trouble. California draws firm lines, and crossing them creates both regulatory and malpractice exposure.
The Good Faith Examination Comes First
Before any aesthetic treatment, a physician, physician assistant, or nurse practitioner must take the patient’s medical history and perform a physical examination of the areas to be treated, to determine whether the patient is a safe candidate.12American Med Spa Association. What Is Required of a Medical Spa’s Good Faith Exams? It cannot be delegated to an aesthetician, a medical assistant, or an RN without advanced practice certification. Skipping it, or treating it as a formality, is one of the most common failures the Medical Board acts on and can produce discipline against the supervising physician’s license.
Lasers and Light-Based Devices
Laser and intense pulsed light treatments must be performed by a physician, or by a registered nurse or physician assistant under physician supervision. Aestheticians, cosmetologists, medical assistants, and unlicensed “laser technicians” cannot legally perform these treatments in California, no matter what training certifications they hold. The supervising physician functions as medical director and is responsible for protocols, staff training, availability for emergencies, and quality assurance.
Registered Nurses and Injectables
RNs may administer injectables such as Botox and dermal fillers under the supervision of a physician who is available for consultation. The physician need not be in the room, but must be reachable and able to intervene. Document the supervisory relationship through written protocols listing the procedures the nurse is authorized to perform.
Nurse Practitioners Under AB 890
AB 890 created new categories of NP autonomy that affect staffing. A “103 NP” may practice without standardized procedures in a group setting that includes at least one physician, after completing a minimum of three full-time equivalent years (4,600 hours) of supervised practice, and may practice in a professional medical corporation — which covers a correctly structured medical spa. The more independent “104 NP” category, allowing practice outside a group setting without standardized procedures, requires another three years as a 103 NP in good standing, and the Board of Registered Nursing was unable to begin certifying 104 NPs until 2026.13Board of Registered Nursing. Assembly Bill 890 Confirm each NP’s specific certification level before assigning clinical duties.
Physician Assistants
PAs must maintain a written practice agreement with their supervising physician specifying the procedures they are authorized to perform and the level of oversight required. These agreements must satisfy the Physician Assistant Board and should be kept on file for regulatory audits.
HIPAA Compliance
Medical spas collect protected health information — names, medical histories, treatment records, photos, payment data — so they are covered entities under HIPAA. Penalties are steep enough to close a small practice.
The Privacy Rule governs use and disclosure. Every patient must receive a Notice of Privacy Practices on or before the first visit, and a signed HIPAA Authorization Form is required before using patient information for anything outside treatment, payment, or healthcare operations. That includes marketing, before-and-after photos on social media, and testimonials.
The Security Rule requires reasonable safeguards for electronic records, including an annual security risk assessment. The Breach Notification Rule sets strict reporting timelines for incidents involving protected health information. Penalties scale by level of culpability, from unknowing violations at the low end to uncorrected willful neglect at the high end, where annual caps run into the millions.
Insurance You Will Need
Medical malpractice insurance (professional liability) is the foundation. Standard policies cover bodily injury, negligence, and treatment errors, with typical limits of $1 million per claim and $4 million aggregate per policy period. Coverage should extend to every clinician and employee performing procedures: nurses, nurse practitioners, physician assistants, and aestheticians working within their scope. If the spa offers telemedicine consultations, confirm telehealth is covered.
General liability covers non-clinical incidents like a slip in the lobby, property damage, or advertising injury. It does not cover data breaches, HIPAA fines, or cyber events. Those require a standalone cyber liability policy, which matters whenever you store patient records digitally, accept online payments, or use cloud-based practice management software. A breach involving protected health information triggers notification costs, potential HIPAA fines, and legal defense that general liability will not touch.
Ongoing Obligations After You Open
Several recurring obligations catch new owners off guard.
Minimum Franchise Tax
Every California corporation owes an $800 minimum franchise tax annually to the Franchise Tax Board. Newly incorporated corporations are exempt in their first taxable year, but the obligation begins in year two and continues every year the corporation exists, even if the business earns nothing.14California Franchise Tax Board. Corporations
Medical Waste
Any facility generating medical waste must comply with California’s Medical Waste Management Act, and a med spa using injectables or performing laser procedures qualifies. Sharps go into FDA-approved rigid puncture-resistant containers labeled with the biohazard symbol; full containers must be sealed and disposed of within 30 days. Biohazardous waste requires red biohazard bags inside labeled, leak-resistant rigid containers.15California Department of Public Health. Medical Waste Management Act Generators must register with the local enforcement agency and keep a medical waste management plan on file.
Local Permits and Zoning
State-level formation and licensing is only part of the picture. The city or county will likely require a local business license, and zoning rules may restrict where a medical facility can operate. Some jurisdictions require a conditional use permit or health inspection. Call the local planning department before signing a lease.
Permit and Filing Renewals
The Fictitious Name Permit expires every two years, and continuing to operate under the business name after it lapses is itself unprofessional conduct under BPC 2285.11Medical Board of California. Fictitious Name Permit The Secretary of State requires periodic Statements of Information, and changes to officers, directors, or the registered agent between filings should be reported promptly, or the corporation risks Franchise Tax Board penalties and eventual suspension.8California Secretary of State. Statements of Information Filing Tips