Delaware Practice Structure Guide: The Professional Service Corporation Act, the P.A. Name Rule and Remote Supervision Limits
Delaware has no corporate practice statute, case or opinion that we found. Its professional corporation act limits stock to Delaware-licensed individuals, and the Board's supervision rule restricts remote-only medical director models.
Key Highlights
- A Delaware professional corporation's stock may be held only by individuals licensed in Delaware for the same service, and the name must contain chartered, professional association or P.A.
- We found no Delaware statute, case, Attorney General opinion or board statement on corporate practice or MSOs.
- Board rule 1700-11.0 requires direct supervision when a diagnosis is rendered or a prescription treatment plan is started, and says a supervising physician cannot be involved in patient care in name only.
- A statute voids non-competes in agreements between or among physicians.
Entity and Ownership
Delaware's Professional Service Corporation Act lists doctors of medicine, osteopathy and podiatric medicine as professional services and lets licensed persons organize a corporation. We found no statute mandating that form. Stock may be held only by individuals licensed in Delaware for the same service, voting trusts and proxies to non-licensed persons are barred, a deceased shareholder's estate may hold stock only for a reasonable administration period, and a holding entity cannot be a shareholder. The corporation renders services only through licensed officers, employees and agents, with clerical and administrative staff excluded, may charge, collect and compensate those who render the services, and may not engage in business other than the professional services stated in its certificate. The name must contain a word descriptive of the service or a shareholder's last name and must contain chartered, professional association or P.A., and words like company, corporation or incorporated are prohibited, so P.C. is not authorized. We found no board pre-approval requirement in the statute, and guides conflict.
The Corporate Practice Position
We found no express corporate practice statute and no Delaware court decision, Attorney General opinion or board statement on the doctrine or MSOs. A Chancery lawsuit reported in a paywalled headline alleges a private equity structure evaded corporate practice bans, and it is an allegation and not a ruling. The practice act defines the practice of medicine to include advertising, holding out, offering to prescribe or administer drugs and rendering decisions affecting or modifying diagnosis or treatment, and makes it a discipline ground to assist an unauthorized person to practice, which are the likeliest hooks if an MSO were found to direct clinical decisions, as our reading and not authority. Vendor surveys characterize Delaware differently, and we treat those as characterizations.
The Management Agreement and Fees
The discipline statute has no fee-splitting, rebate or kickback ground, and we found no authority on percentage fees. It does bar unethical advertising and practice under a false or assumed name, so branding a practice under the MSO's name is worth review, which is our inference. We found no Delaware-specific records provision. A statute voids covenants not to compete in employment, partnership or corporate agreements between or among physicians while preserving damages reasonably related to the injury from termination, and we found no ruling on whether it reaches a non-physician employer or MSO. Delaware has a nonprofit health care conversion notice law and a 2026 hospital-only measure, and we found no physician-practice or MSO transaction notice law, which should be confirmed.
Delegation and Supervision
Delaware has no med spa statute or facility license that we found. Board rule 1700-11.0, which we read through a copy that may not be the latest version, says the delegating physician is responsible and must supervise and cannot be involved in patient care in name only, standing orders must not be used to make a medical diagnosis or prescribe medication, direct supervision with the physician on premises is required when a diagnosis is rendered or a prescription treatment plan is started, and indirect supervision requires the physician to be reachable and able to be on site within 30 minutes. A supervising physician who ignores the rules is treated as permitting unauthorized practice. In our reading that squeezes ghost-director and remote-only models for prescription-based services such as injectables, peptides, GLP-1 and hormone therapy.
How We Structure It
As a rule we set up a professional corporation (with the P.A. designation) 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 Delaware the practice name carries the P.A. designation, the physician directly supervises whenever a diagnosis or prescription plan begins, and branding review checks the assumed-name rule.
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.
MedGrid MSO provides management services to independently owned practices; it does not practise medicine and does not direct clinical decisions. Requirements vary by state and by service, and change over time — nothing on this page is legal or medical advice. Talk to us or your own counsel before making a structural decision for your clinic.