Arkansas Practice Structure Guide: The Medical Corporation Act, Board Registration and a 2025 Non-Compete Ban

Entity and Ownership

The Medical Corporation Act, sections 4-29-301 to 4-29-313, which we read in the Medical Board's compilation revised August 2025, lets persons licensed under the Medical Practices Act form a corporation under the Business Corporation Act. Only employees licensed under the Medical Practices Act may give medical or surgical treatment, consultation or advice. All officers, directors and shareholders must be licensed at all times, and no unlicensed person may have any part in the ownership, management or control, or hold a proxy. The Department of Health reads that as limited to physicians and physician assistants. The name may include shareholders' names but must end in Chartered, Limited, Ltd., Professional Association or P.A. No corporation may open, operate or maintain an establishment without a certificate of registration from the Board, which checks that incorporators, officers, directors and shareholders are licensed with no pending discipline, costs $25 to register and $10 a year to renew, must be posted, expires January 1 and cannot be assigned. The Board may suspend or revoke it, including for an unlicensed or disciplined owner or employee who is not promptly removed. A foreign medical corporation can register if every officer, director and shareholder is licensed in its state of incorporation and no non-physician takes part in ownership, management or control. An LLC practicing medicine also needs a Board certificate, and its statute number has changed, so we did not confirm the current one.

The Corporate Practice Position

The restriction is statutory. A 2015 Attorney General opinion, which we read only through a summary site, says a for-profit corporation that is not registered with the Board cannot employ or contract with physicians or advanced practice nurses and bill patients or payers as the provider, and treats mere ancillary services such as billing and collections for a registered corporation as outside the Act. In Junkin v. Northeast Arkansas Internal Medicine Clinic (Ark. 2001), a physician argued that a management services arrangement violated the Act, and the Supreme Court declined to reach the merits, so it sets no holding. We found no other decision. A December 2025 Department of Health and Nursing Board document says the statutes appear to limit ownership to physicians and physician assistants, that many clinics are owned by advanced practice nurses through corporations or LLCs, that the Nurse Practice Act is silent so there is a de facto acceptance and that enforcement is inconsistent across boards. We do not rely on it.

The Management Agreement and Fees

We searched the Medical Practices Act and the Board's ethics rule and found no express fee-splitting prohibition. The discipline statute covers aiding unlicensed practice, improper advertising and violations of Board rules. We found no Arkansas authority on percentage fees, and the control bar in the Act is the operative limit on an MSO, with the Attorney General's opinion implying the MSO must not bill as the provider. A Board rule bars an entity engaging a provider from misleading patients about a departing provider's new location and requires a patient list within 21 days of the provider's request, which is relevant for transition terms.

Act 232 of 2025 adds a statute that voids a non-compete restricting a physician's right to practice within their scope of practice, with a sale-of-business carve-out, and it does not cover nurses or physician assistants. The text does not state an effective date, secondary sources say mid-July 2025, and retroactivity is unclear. We found no transaction notice law. Telemedicine requires a professional relationship, and an internet questionnaire alone does not establish one.

Med Spa and Aesthetic Rules

We found no Arkansas med spa statute or rule. Board rules treat medical lasers as the practice of medicine, requiring the physician to personally diagnose and prescribe the treatment, delegate only the task to trained personnel and be available for complications. Delegation to unlicensed staff must be supervised, and delegated drug administration is allowed only within the physician's offices, for tasks needing no medical judgment. The Nursing Board's draft revisions of its aesthetics and IV hydration position statements were open for comment until October 19, 2026 and are not adopted. They say aesthetics is outside LPN scope, standing orders are not acceptable substitutes for individualized orders and every IV infusion needs a client-specific order after a good-faith exam. A February 2026 Nursing Board article says IV spa facilities are not individually licensed.

How We Structure It

As a rule we set up a medical corporation owned by the licensed physician, with no exceptions for what looks like a more flexible state. Patients pay the physician-owned practice. The practice pays the management company a fixed monthly fee under a written management services agreement. The management company pays MedGrid a fixed monthly retainer for consulting. The MSO never practices medicine, and the physician makes every clinical decision. In Arkansas the corporation holds the Board certificate and bills as the provider, and the MSO handles only ancillary services.

Disclaimer

This article is general educational information, not legal advice. Entity and corporate practice rules change, and parts of this summary rest on secondary sources, so have health care counsel in the state confirm the structure before you form or sign anything.