Helped Clients Recover Over $25 Billion. Since 1979.
Helped Clients Recover Over $25 Billion. Since 1979.
A medical spa sits on the line between a retail beauty business and a medical practice, and California law takes that line seriously. Who owns the business, who supervises treatments, and how money moves between the owners are all shaped by rules that don’t apply to an ordinary small business. The Schenk Law Firm builds the entities, ownership documents, and contracts a California med spa runs on.
Because a med spa delivers medical treatments, California’s Corporate Practice of Medicine doctrine applies to it. In plain terms, a business corporation or a non-licensed investor can’t own or control the entity that provides the medical services. California also doesn’t allow a licensed medical practice to operate as an LLC. Getting the structure wrong at the start is expensive to unwind, because fixing it usually means re-forming entities, re-papering contracts, and renegotiating with partners who have already put money in. The Schenk Law Firm sets up the ownership structure and the agreements that sit on top of it, working alongside your accountant and, where a question calls for it, healthcare regulatory counsel.
California Business Law Since 2005
The Schenk Law Firm’s business practice has operated out of North Park in San Diego since 2005. We form entities, draft and negotiate the agreements between owners, and handle the contracts a business signs with everyone else. A med spa needs all of that, plus a structure that respects California’s limits on who may own a medical practice.
Ownership and Management Documents
We draft professional corporation formation documents, shareholder and buy-sell agreements, and the management services agreement that connects a management company to the professional corporation. These are the documents that decide who controls what, how the money is split, and what happens when an owner wants out.
Trademark Protection for Your Brand
David Lizerbram, Of Counsel to The Schenk Law Firm, has more than two decades of trademark practice and over 850 trademark filings. A med spa’s name is one of its most valuable assets. We handle clearance searches, federal registration, and enforcement against copycats.
Litigation and Transactions Under One Roof
Most of this work exists to keep you out of court. When a partner dispute, a vendor fight, or a lease problem does turn into litigation, the firm has trial lawyers in the building, so you aren’t starting over somewhere else.
Entity Formation and Ownership StructureCalifornia doesn’t permit a medical practice to be organized as an LLC, and it doesn’t permit a non-licensee to own the entity that provides medical services. For most med spas, that means a professional corporation owned by an eligible licensed professional, usually paired with a separate management company owned by the business partners. Which licenses qualify to own the professional corporation depends on the services you plan to offer, so the answer changes with the treatment menu. We form both entities, draft the ownership documents, and put the agreement between them in writing before the doors open.
| Professional Corporation (PC) | Sole Proprietorship | General Partnership | |
|---|---|---|---|
| Liability Protection | Limited (business debts and contracts; does not shield individual malpractice) | None (personal assets at risk) | None (each partner liable for all partnership debts) |
| Tax Treatment | C-Corp or S-Corp election available | Pass-through (Schedule C) | Pass-through (Form 1065) |
| Ownership Requirements | 51%+ must be licensed physicians; remaining may be certain other licensed professionals | Single physician | Two or more physicians |
| Formation Complexity | Moderate (articles, bylaws, Medical Board filings, shareholder agreement) | Minimal (business license only) | Low (partnership agreement recommended but not legally required) |
| Governance Requirements | Annual meetings, corporate minutes, board resolutions | None | Per partnership agreement |
| Transferability | Shares transferable to qualified licensees per shareholder agreement | Not transferable | Per partnership agreement terms |
| Best Suited For | Group practices, practices seeking liability protection, practices planning for growth or eventual sale | Solo physicians with minimal risk exposure | Two-physician practices in early stages |
When two or more people go into a med spa together, whether that’s two physicians, a physician and an investor, or a licensed injector and a business partner, the shareholder agreement decides what happens when things change. It should cover how profits are split, who makes which decisions, what a departing owner’s interest is worth and how it gets paid, and what happens if an owner loses a license, gets divorced, or simply stops showing up. California sharply limits non-compete agreements, so restrictions that work in other states often won’t work here. The Schenk Law Firm drafts and negotiates these agreements, and we’d much rather do it before a disagreement than after one.
A management services organization, or MSO, is a non-medical company that handles the parts of a med spa that aren’t clinical: marketing, scheduling, non-clinical staffing, equipment, the lease, bookkeeping, and back office. It contracts with the professional corporation through a management services agreement. This is the structure that lets non-licensed owners and outside investors participate in the economics of a med spa without owning the medical entity. The management fee and the division of authority are the provisions that decide whether the arrangement holds together, and they need to be drafted deliberately rather than copied from a template. The Schenk Law Firm drafts and negotiates these agreements and the ownership documents that go with them.
A med spa lease is not a standard retail lease. Treatment rooms need plumbing, dedicated power, and ventilation that most shell spaces don’t have, and the tenant improvement allowance rarely covers what the buildout actually costs. Beyond the buildout, the provisions that matter most are the permitted use clause, the personal guarantee and whether it burns off over time, operating expense caps, the right to assign the lease if you sell the business, exclusivity against a competing med spa in the same center, and signage. Landlord forms are written for the landlord. The Schenk Law Firm reviews and negotiates these leases before you sign one.
Picking a name someone else already owns can cost you your signage, your website, and your search rankings. A clearance search before launch tells you whether the name is usable. Federal registration with the United States Patent and Trademark Office then gives you nationwide rights, the ® symbol, and a real basis to stop a competitor from opening under a confusingly similar name. Signature treatment names, package names, and logos can be registered as well. David Lizerbram has filed more than 850 trademark applications and handles clearance, registration, and enforcement for the firm’s clients.
Med spas sign a lot of paper with vendors: laser and device purchase or lease agreements, practice management and records software, payment processing, patient financing programs, and marketing agencies. The provisions worth reading closely are auto-renewal clauses that lock you into another full term, one-sided indemnification, unilateral price increases, mandatory arbitration in the vendor’s home state, and equipment liens that complicate a future sale. The Schenk Law Firm reviews these contracts and negotiates the terms that matter before you’re bound by them.
Most med spas need a physician in a medical director or supervising role. That relationship belongs in a written agreement covering the scope of oversight, availability and response expectations, who approves treatment protocols, compensation, insurance, indemnification, records access, and how either side ends it. Compensation deserves particular attention, because tying a medical director’s pay to the volume of medical services raises problems under healthcare payment rules. The Schenk Law Firm drafts and negotiates these agreements for med spa owners and for physicians who’ve been asked to serve as medical director. Where an arrangement raises a question that needs a healthcare regulatory specialist, we say so and help you find one.
A professional corporation has to act like one. That means annual shareholder and director meetings, written minutes, board resolutions for significant decisions, current officer and director records, and Statement of Information filings with the California Secretary of State. Letting these slide is one of the easiest ways to weaken the liability protection you formed the entity to get, and missing records surface at the worst possible moment, in the middle of a sale or a financing. The Schenk Law Firm handles ongoing governance so the corporate record matches the decisions the business actually made.
Every med spa ends in a sale, a transfer to a partner, a wind-down, or a fight. A buy-sell agreement decides which one, years in advance. It sets the events that trigger a buyout, how the interest is valued, how the payout is funded, and who has the right to buy first. Because the medical entity can only be held by an eligible licensee, a med spa buy-sell also has to answer what happens if the only qualified owner dies, retires, or loses a license. The Schenk Law Firm drafts these agreements and updates them when the ownership changes.
Buying or selling a med spa raises questions a plain business sale doesn’t. The buyer has to be able to hold the medical entity or bring in someone who can, which narrows the buyer pool. Medical director agreements, device leases, software contracts, and the premises lease all have to be checked for whether they can be assigned at all. Patient records have to be handled under the privacy rules that apply to them. Whether the deal is structured as an asset sale or an equity sale changes most of those answers. The Schenk Law Firm represents buyers and sellers from letter of intent through closing, and brings in specialist counsel where a deal calls for it.
Outside investment is where the structure matters most. An investor who isn’t a licensed professional can’t own the medical entity, so the investment normally goes into the management company and the returns travel through the management services agreement. The documents all have to tell the same story: the investor’s rights, the management fee, the control provisions, and the ownership of the medical entity. California also imposes notice requirements on certain healthcare transactions above a size threshold, so a larger deal needs that checked before anyone signs. The Schenk Law Firm structures and documents these investments and flags where a transaction needs specialist review.
Med spas run on a mix of licensed clinicians, aestheticians, front desk staff, and outside contractors. The paperwork should match what people actually do: written offer letters or employment agreements, a defensible call on employee versus independent contractor under California’s strict test, confidentiality and trade secret protection, and client list provisions that stay enforceable given California’s limits on non-competes. Commission and bonus structures for treatment providers need care, because pay tied to selling medical services raises different questions than pay tied to selling retail products. The Schenk Law Firm drafts the agreements between a med spa and the people who work in it, and brings in employment counsel where a classification or wage question calls for one.
Growth changes the legal picture. A second location may need its own entity, its own lease, and its own supervising clinician, and a management agreement written for one site usually doesn’t scale to three. Bringing on a partner at the new location means reopening the ownership documents. Licensing your brand to an operator you don’t control can cross the line into franchising, which is a separate regulatory regime with its own registration and disclosure requirements, and we’ll tell you plainly when what you’re describing is a franchise. The Schenk Law Firm handles the entity work, the agreements between locations, and the trademark licensing that goes with putting your name on a business you don’t fully own.
Attorney advertising. This page is general information about California business law and is not legal advice. Reading it, or contacting The Schenk Law Firm through this website, does not create an attorney-client relationship. Med spa ownership rules are fact-specific and turn on the services offered and the licenses involved. Talk to a licensed California attorney before making decisions about your structure, your contracts, or your obligations.