Forming a Texas Professional Association

Professions cannot insulate themselves with a corporate shield to guard against malpractice. So those individuals must have unique professional entities that provide some of the liability protection of a corporate entity. The primary purpose why professions choose to form a professional association is that, unlike a general partnership, an owner is not personally liable for the negligence or malpractice of other owners.

The professional association is the most popular entity choice for physicians in Texas. But this is primarily due to inertia. Other entity choices exist that should be examined because they may provide benefits unavailable in a professional association. A professional association or “PA” is the most limiting kind of entity. Only certain healthcare professionals may operate a PA. The exclusive list includes medical doctors, doctors of osteopathy, podiatrists, dentists, chiropractors, optometrists, and therapeutic optometrists, veterinarians, and licensed mental health professionals. Only individuals authorized by the State of Texas may operate in a PA. Only physicians licensed by the Texas Medical Board can own a PA that engages in medical practice.

Its members own a professional association. The members hold shares, but they are not referred to as “shareholders.” This somewhat confusing terminology reveals the exceptional care required when creating a professional association. Like a corporation, the members adopt bylaws for governing the internal affairs of the PA. A board of directors or executive committee PA governs the PA by the election of the members. The board or executive committee elects officers, which must include a president and secretary. All officers and all members of the board or executive committee must also be members of the PA, and the president of a PA must also be a member of the board or executive committee.

Creating a Professional Association in Waco Texas

You should contact a business lawyer who understands the complications of a PA if you are interested in forming a professional association. Dunnam & Dunnam has the experience to advise healthcare professionals in the operation and creation of professional associations in Waco, Texas. Call us at 254-753-6437 to schedule a consultation with a business lawyer in Waco.