Michigan’s ownership rule is short, and it eliminates a structure people propose constantly.
Under the Professional Service Corporation Act (Act 192 of 1962), one or more licensed persons may organise a professional corporation, and each shareholder must be licensed in one or more of the professional services the corporation renders. Then § 4(3) tightens it: where the corporation renders a professional service included within the Public Health Code, all shareholders must be licensed or legally authorised in Michigan to render the same professional service.
What that rules out
- An investor holding a minority stake in the medical PC. Not permitted at any percentage.
- A nurse practitioner and a physician co-owning the medical PC, because they are not licensed to render the same professional service.
- A PA taking equity in the medical entity as a retention tool.
- A holding company owning the PC.
What is still available
The management services organisation. A non-licensee may own the company that provides premises, technology, marketing, staffing administration and billing operations, and be paid a fixed fair-market fee for it. That is the route, and in Michigan it is close to the only route for non-licensee participation in the economics.
For clinician retention, equity in the MSO, profit-linked compensation structured lawfully, or straightforward employment terms all remain available. Equity in the medical PC does not.
It pairs oddly with the delegation rule
Michigan is unusually permissive about who may perform a delegated act — including unlicensed individuals qualified by training — and unusually strict about who may own the company. Operators tend to read one of those and assume the other matches. They do not.
Before you paper a Michigan deal
- Confirm what professional service the corporation’s articles actually name.
- List every intended shareholder and check each against that service.
- Move non-qualifying participants to the MSO and price the management fee properly.
- Check that the physician retaining medical judgment is the same person your paperwork says holds it — only individuals licensed to practise medicine may exercise it.
Related reading
Frequently asked questions
Can a nurse practitioner own shares in a Michigan medical PC?
Not alongside physicians where the corporation renders a Public Health Code service, because all shareholders must be licensed to render the same professional service.
Can an investor take a minority stake?
Not in the professional corporation. Investment is structured through the management services organisation.
Does this apply to every professional corporation?
The same-service requirement in § 4(3) applies where the corporation renders a professional service included within the Public Health Code, which covers medicine.
What is the alternative for clinician equity?
Ownership in the MSO, or compensation structures that do not require shares in the medical entity. Confirm the specifics with Michigan counsel.
General information about Michigan ownership rules, not legal advice. Confirm your obligations with healthcare counsel licensed in Michigan.