Virginia Practice Structure Guide: The Professional Corporation, the Parikh Decision and the 2026 Non-Compete Ban
Virginia limits ownership of a healing arts professional corporation to licensed practitioners, the Supreme Court has held that a non-professional corporation cannot practice medicine, and clinician non-competes are barred from July 1, 2026.
Key Highlights
- A healing arts professional corporation in Virginia may be owned only by individuals or qualifying entities licensed to render the same service.
- In Parikh v. Family Care Center (2007) the Supreme Court held a non-professional corporation cannot engage in the practice of medicine, without deciding the broader entity question.
- A 1995 Attorney General opinion approved physician employment only where physicians keep exclusive control over decisions requiring professional medical judgment.
- Non-competes with health care professionals are barred from July 1, 2026, with sale-of-business and limited other exceptions.
Entity and Ownership
Virginia's professional corporation chapter limits ownership of a healing arts professional corporation to individuals, or qualifying professional entities, licensed to render the same service, and at least one organizer must be licensed in Virginia. The corporation is formed with the State Corporation Commission, and we saw no Board of Medicine certificate step for healing arts corporations. The P.C. designation in the name is optional. Virginia has no P.A. or S.C. form for physicians, so the professional corporation is the form we use.
The Corporate Practice Position
There is no standalone corporate practice statute. Unlicensed practice is unlawful for any person, partnership, corporation or other entity, with civil penalties, and a savings provision says entities of the listed types may practice through licensed individuals they employ or contract with. In Parikh v. Family Care Center (Va. 2007) a corporation whose shares passed to a non-physician stopped being a professional corporation, and the Court held a non-professional corporation cannot engage in the practice of medicine. It did not decide the broader question, and we do not overstate the holding.
A 1995 Attorney General opinion concluded that for-profit subsidiaries of a nonprofit hospital may employ physicians so long as the physicians exercise exclusive control over decisions requiring professional medical judgment. A 1992 opinion on nonprofits is posted by the Board, and we could not read it. We found no reported enforcement. Vendor guides disagree on whether Virginia has a corporate practice doctrine, and we rely on the statutes and the case.
The Management Agreement and Fees
Virginia makes it a Class 1 misdemeanor for a physician to share a professional fee with another physician in return for a referral, with exceptions for bona fide partnerships and group practices, joint operating costs and federal safe harbors, and violations are grounds for discipline. Commentary notes the statute reaches splitting among professionals. We found no Virginia statute, Board rule or opinion banning or capping percentage-of-revenue management fees. Records must be kept six years after the last encounter.
House Bill 627, effective July 1, 2026, bars non-competes with health care professionals licensed by the Boards of Medicine, Nursing, Counseling, Optometry, Psychology or Social Work. It is not retroactive and has exceptions for sale-of-business covenants, narrow customer non-solicits that cannot stop a clinician from telling patients where they now practice, and recovery of recruitment costs. It carries a $10,000 civil penalty per violation and a private right of action. Whether it reaches independent contractors is unconfirmed.
Med Spa and Prescribing Rules
Virginia has no med spa statute, facility license or mandated medical director. A practitioner may delegate nondiscretionary activities that do not require professional judgment, and trained nurses and technical personnel may give injections ordered by a prescriber. Laser hair removal is governed by statute and Board regulation. For prescribing, a bona fide practitioner-patient relationship is required with a history, risk and benefit discussion, appropriate exam and follow-up, and telemedicine can establish it if the standard of care permits. Controlled-substance prescribing by telemedicine requires a Virginia practice location or a referral path to a Virginia practitioner.
2025 and 2026 Developments
A 2026 bill to study private equity in health care did not advance, and we found no Virginia transaction notice or corporate practice bill enacted.
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 Virginia the physician holds exclusive control of professional judgment, and the agreement uses no non-competes against clinicians employed after July 1, 2026.
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.