Professional Associations are unique creatures of Texas entity and business organization law. While they can issue stock, the holders of the stock are called “members”, and while they are operated under Texas corporate law, they are not corporations.
Form 204-Forming A Professional Assocation
Professional Associations are exclusively limited to: doctors of medicine, osteopathy, and podiatry, dentists, chiropractors, optometrists, therapeutic optometrists, veterinarians or licensed mental health professionals. If you do not fall into one of these professional categories, you may not form a Professional Association in Texas.
These professionals may also form “Joint Practices” where a variety of those professionals form one PA under which services are performed. The authorized joint practices are between doctors of medicine, osteopathy, and licensed podiatrists; doctors of medicine, osteopathy, and optometrists; and Professionals, other than physicians, engaged in related mental health fields such as psychology, clinical social work, licensed professional counseling, and licensed marriage and family therapy. In these joint practices, the Texas statutes authorizing professional associations specifically limits the influence of one practitioner over another—the authority of each is limited by the scope of practice of that practitioner. So, for instance, there could be no by-law or financial incentive that would allow for one professional to assert any kind of influence or control over the practice of another professional in the group.
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Bylaws are required for all Texas corporations, and Professional Associations are no exception. Topics in a Professional Associations bylaws often include the number and role or the directors and how they will be elected, the buy in process for new members, the types of officer roles that will be appointed, and how members of the professional association will conduct voting on certain issue. Regardless, bylaws can be as restrictive or permissive as the group decides they want to be—it is only important that they not use an online form made for someone else’s PA. It is almost never the case that two separate groups of professionals will want or need to have their business run the exact same way.
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If you are wanting more information on forming a Professional Association in Texas, you can contact San Antonio Business Attorney Nathaniel Gilbert to answer any questions or point you in the right direction for your joint venture. To get in touch with Nate directly, Click Here. To learn more about Texas Business Law and Management, Click Here.
