Legal Question in Business Law in California

Re: LLC for a nurse registry

About four years ago, I was approached by the operators of a Texas-based nurses' registry which was organized as a Texas Professional Limited Liability Company (PLLC). They wanted to expand into California and retained me to advise them on the best form of business organization and to draw up the papers.

As you may know, California law does not provide for a PLLC, or the practice of any licensed professions by an LLC.

My files do not reflect, and I do not recall for sure, the results of my research. I do know that I determined that a corporation was the best way for these folks to proceed.

Both promoters were RNs, but the corporation I formed was a regular, and not a professional, corporation. I believe we determined, as you seem to have, that a nurses' registry does not, in itself, practice the profession of nursing, and hence could be an LLC or a corporation. This could depends to some extent on what the registry actually does, of course, and its also possible that a nurses' registry could come under laws regulating employment agencies or temp agencies generally.

I recall obtaining a list of nurses' registries and checking their names against the Secretary of State and county fictitious business name lists to see whether they were LLCs, corporations, partnerships or proprietorships. You could do the same thing, i.e. let others show you the way.

In any case, my work in this area was four years ago and my recollections and files incomplete. The law regarding LLCs is evolving rapidly, and things may have changed. I suggest sampling other registries to see how they're set up, and checking with the Nurses' Licensing Board.

Re: LLC for a nurse registry

My colleague Mr. Whipple's response was very thorough and well thought out. I would only add one comment. If you determine that you can proceed as an LLC, I would urge you to consult with a tax professional on the whether an LLC is the best entity for you from a tax standpoint. There are many circumstances where a corporation will receive better tax treatment.

Re: LLC for a nurse registry

This is a regulated area of law and medicine that will require you to comply with a series of administrative issues. It can certainly be done, as evidenced by others already in the field. All it will take is good tax and legal advice in the formation to tailor it to your needs. Contact me if interested in doing so.