Michigan Practice Structure Guide: Chapter 2A Professional Corporations, Attorney General Opinions and a Quiet Legislature

Entity and Ownership

The Professional Service Corporation Act of 1962 was folded into Chapter 2A of the Business Corporation Act, effective January 2, 2013, and the current sections are MCL 450.1281 to 450.1290. A corporation formed to provide a learned-profession service must incorporate as a professional corporation. Each shareholder must be a licensed person in one of the services provided, or an entity wholly owned by such persons, and for Public Health Code services each shareholder must be licensed in the same service, with physicians, osteopaths, podiatrists and chiropractors permitted to co-own. Physician assistants may co-own with those physicians but cannot form a PA-only entity, and a physician in a practice agreement with physician assistants must be an owner of the same entity. The name must contain professional corporation or P.C., services are rendered only through licensed officers, employees and agents, the corporation may do no other business, and stock issues and transfers only to eligible persons. Articles are filed with the LARA Corporations Division and must state the specific professional service, and we found no separate board certificate.

The Corporate Practice Position

Michigan has thin case law, and a May 2026 law-firm article says the doctrine rests on a combination of statutes, case law and regulatory interpretation. The Attorney General opinions are reported through secondary text, because the Attorney General's pages returned errors. A 1980 opinion says laymen may not practice medicine directly or indirectly through a corporate structure, a 1989 opinion says a business corporation may not engage in activities only the learned professions may perform, and a 1993 opinion says nonprofit corporations may employ physicians because their purpose cannot involve pecuniary gain. Practicing without a license is a felony.

In Miller v. Allstate (Mich. 2008), the Supreme Court held an insurer lacked statutory standing to argue that a physical therapy provider was improperly incorporated, because only the Attorney General can challenge corporate status. That means payors cannot raise formation defects, but the Attorney General still can. Insurance no-fault cases hold that an unlicensed entity cannot bill for services, which is limited relevance to a cash-pay practice. In October 2023 the Michigan State Medical Society asked the Attorney General to investigate MSO structures where physicians own in name only, and the office said it was reviewing it. We found no public outcome.

The Management Agreement and Fees

The Public Health Code lists as unethical business practices dividing fees for referral of patients or accepting kickbacks, false or misleading advertising, and negligent delegation or supervision. That is referral-focused, and we found no statute or case on percentage-of-revenue fees. Practitioner guidance says fee splitting with non-licensed persons is prohibited, compensation to management companies should be fair market value and the MSO may be owned by non-licensed investors, and lists tripwires including nonprofessional owners or directors of the professional entity, the MSO employing or supervising licensed staff directly, MSO branding that implies it delivers care, long or effectively irrevocable agreements and above-market fees. Michigan allows reasonable non-competes, including for physicians, and bills to ban them for physicians introduced in 2025 and 2026 had not moved. We found no transaction notice law.

Med Spa and Aesthetic Rules

Michigan has no med spa license. A licensee may delegate to a licensed or unlicensed individual qualified by education, training or experience, within the licensee's scope and under supervision, but not acts needing the licensee's skill and judgment, and surgical-instrument procedures go only to licensed individuals with narrow exceptions. Dermatologic laser procedures must be done under a licensed physician's supervision with patient consent, with physicians, physician assistants and nurse practitioners in health care facilities exempt, and supervision means continuous availability of direct communication, scheduled review and predetermined procedures and drug protocol. A 2025 law adds dermaplaning and microdermabrasion with physician supervision and consent. We found no injectable statute and no IV-specific rule.

How We Structure It

As a rule we set up a professional 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 Michigan the professional corporation owns the clinical relationship, the management company has no clinical role and its fee is fixed.

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.