North Carolina Practice Structure Guide: The Board Certificate, the Percentage-Fee Position and the APP-Owned Practice Warning

Entity and Ownership and the Board Certificate

The Professional Corporation Act, G.S. Chapter 55B, requires at least one licensee incorporator, all shares held by licensees, at least one licensee director and officer, and the licensing board's certification of compliance in the articles. Shares may be issued and transferred only to licensees with board certification, voting trusts are barred and violating issuances are void. The name uses P.A., Professional Association, P.C. or Professional Corporation. A corporation renders one type of professional service plus ancillary services, with listed physician combinations including with physician assistants, nurse practitioners and certain other professionals.

The Medical Board requires a certificate of registration, which we confirmed on the Board's site. The sequence is an online application with a $50 fee, a notarized Certificate of Incorporators, issuance of the Board's certificate and stamped articles, and filing with the Secretary of State within four months or the certificate expires. Any stock issuance or transfer needs Board certification before it happens, and no assumed names are allowed for registered entities. The Board reviews the entity and not the management agreement. Non-licensees use a separate portal and may not form a medical-practice entity.

The Corporate Practice Position

Position Statement 10.1.2, adopted in 2016 and amended in September 2025, says businesses practicing medicine must be owned in their entirety by active North Carolina licensees or the permitted combinations, that a licensee working for a violating business may be disciplined regardless of employee or contractor status, and that the Board may seek injunctive relief against lay owners, with exceptions for hospitals, HMOs, public health clinics, charitable nonprofits and nonprofit-hospital-owned practices. It does not mention MSOs by name. The Board's published articles describe straw ownership, where a physician is the nominal shareholder while a non-physician holds real control, often through a management agreement sending most revenue to the non-physician, and a case study of a paper medical director paid $2,000 a month with no duties as an example of paying for use of a license. A July 2026 law-firm article reports the Board cites an estimated 30 to 40 corporate practice cases a year and that a February 2026 Board podcast named management agreements as evidence in straw ownership cases, and we could not read the transcript to confirm the red flags it lists. Unlicensed practice is a misdemeanor.

The Management Agreement and Fees

Position Statement 10.1.1, last amended in 2021, says that except as permitted by law, a licensee cannot share revenue on a percentage basis with a non-licensee, and that doing so is fee splitting and grounds for discipline. A percentage-of-collections MSO fee is therefore the highest-risk term, and it is a Board position and not a statute, so we state it that way. The Board's line is non-licensee, so the MSO's ownership matters. A flat, fixed or cost-plus fee is lower risk. A referral statute bars compensating anyone for recommending or securing the provider's employment, and the Board's employment statement tells licensees to scrutinize non-competes and non-solicits and to accept employment only from lawfully authorized employers. We found no North Carolina statute banning non-competes and no transaction notice law for physician practices.

The Supervision Statement and Med Spa Rules

Position Statement 9.1.1, amended in July 2025, says the physician bears ultimate responsibility for supervised care, uses a multi-factor test and says practices owned by advanced practice providers cannot employ or contract with physicians to provide medical services on behalf of the practice, except a contract solely to meet legal supervision requirements, warning about private companies that pair physicians with APP-owned practices. That matters directly to med spa models. North Carolina has no med spa statute or dedicated position statement. The laser statement treats lasers as surgery to be done by a physician or licensed professional under supervision, preferably on site, with a pre-treatment exam for hair and tattoo removal, and was listed for review in January 2026. A 2025 law removes supervision for experienced physician assistants in team-based settings, with the rule's finality unconfirmed. The practice of medicine occurs where the patient is located. We found no primary North Carolina IV rule.

2025 and 2026 Bills

Senate Bill 570 in 2025 would have banned common stakeholders between a medical practice and its MSO unless the MSO is wholly owned by North Carolina licensees, and required physician control of medical decisions, and it stalled in the Rules Committee. Senate Bill 978 in 2026 would ban non-competes for physicians and nurses employed by hospitals and review hospital transactions, and was re-referred to Appropriations. We treat neither as law, and language from the first could reappear.

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 North Carolina the licensed owner holds all shares, every transfer is certified by the Board first, the MSO fee is a fixed amount and no physician works under a practice owned by an advanced practice provider.

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.