How to Start a Med Spa Business in California

October 29, 2026

Starting a med spa in California is a legal structure problem before it is a marketing problem. Under the corporate practice of medicine rule, you cannot simply form an LLC, sign a lease, and start offering injectables and laser treatments. The medical side of the business has to be owned by a physician or a properly organized medical corporation, and the clinical work has to be supervised by licensed clinicians. This guide follows the order that matters: why ownership is restricted, the compliant structure, the limits on investors and management companies, staffing, and then the state and local registrations that come after.

Disclaimer: This article is informational, not legal or tax advice. Med spa law in California involves several overlapping codes and licensing boards, and these rules can change. Work with a California health care attorney and a CPA before you sign a lease, a management agreement, or an investment term sheet.

What You Need Before You Start

Gather these items before you file anything:

• A physician or physicians who will own the medical corporation and serve as its clinical leaders
• A health care attorney with medical practice or med spa experience
• A CPA familiar with California corporate and franchise tax
• A written list of every treatment you plan to offer, and the licensed person who will perform each one
• Proposed entity names, checked in the Secretary of State's business search
• An account with bizfile Online
• A federal Employer Identification Number (EIN) from the IRS
• A commercial lease and a zoning check for the address
• Current California license information for each clinician, verified through the issuing board

Step 1: Understand Why Ownership Is Restricted

The corporate practice of medicine rule starts with Business and Professions Code 2400, which provides that corporations and other artificial legal entities have no professional rights, privileges, or powers. Practicing medicine is limited to people holding a physician's certificate. Practicing medicine without one is a public offense under BPC 2052, punishable by a fine of up to $10,000 and up to a year in county jail.

In practical terms, an investor, a spa chain, or a non-physician founder cannot own the part of the business that delivers medical treatment. Neurotoxin and filler injections, prescription-based treatments, and laser procedures are medical services, so the entity that provides them has to be owned and controlled the right way. Your business plan should be built around that constraint from the start, not adjusted after the entity is formed.

Step 2: Set Up a Compliant Medical Professional Corporation

An LLC cannot own a medical practice, because an LLC cannot render professional services (Corporations Code 17701.04(e) and 13401(a)). This is one of the most expensive mistakes in med spa formation. Founders who form an LLC first often have to restructure later, which means new documents, new contracts, and new tax filings.

The compliant owner is a physician or a medical professional corporation organized under the Moscone-Knox Professional Corporation Act. The corporation's shares must be held by licensed physicians. Corporations Code 13401.5 allows certain other licensed professionals, including registered nurses, physician assistants, podiatrists, and psychologists, to hold shares, but together they may hold no more than 49 percent. Confirm with your attorney which holders are permitted and how the share structure is documented.

1. Choose and check the corporate name. A corporation name needs no designator. If you need time to finalize the name, you can reserve it for $10 for 60 days. Reservations cannot be renewed for consecutive periods, so plan the filing date accordingly. Search and reservation are available at the Secretary of State's name availability page.
2. File the articles on the professional corporation form. The professional corporation articles (form ARTS-PC) cost $100 and are filed through bizfile Online. The articles must contain a specific statement that the corporation is a professional corporation (Corporations Code 13404). Check with the Medical Board of California whether a certificate of registration is required before the corporation renders medical services.
3. Adopt bylaws and issue shares to eligible holders. Document each shareholder's license and the share percentages. Keep the cap-table records current, because the 49 percent limit on other licensed professionals is a standing requirement.
4. Get a federal EIN and open a business bank account in the corporation's name.
5. Calendar the Statement of Information. A corporation files Form SI-550 within 90 days of filing the articles and then every year (Corporations Code 1502). The fee is $25 each year. Do not treat it as a biennial filing. Missing it can result in penalties.

Step 3: Decide How the Brand Name Fits

If the med spa will operate under a brand name instead of the physician's own name, you need a fictitious name permit from the Medical Board of California under BPC 2285 and 2415. Check with the Board for the process, the fee, and what it requires for the name. This is separate from the county fictitious business name filing described in Step 6, and you may need both.

Step 4: Structure Investor and Management Company Relationships

Non-physician entrepreneurs usually take part through a management services organization (MSO). An MSO is a separate company that provides non-clinical services to the physician's corporation under a written management agreement. Typical services include billing, marketing, scheduling, and facilities. The physician keeps clinical control. The MSO cannot direct the medical decisions the physician is licensed to make.

Private equity and hedge fund involvement is governed by SB 351, codified in Health and Safety Code 1191. A private equity group or hedge fund involved with a physician practice may not:

• Interfere with the physician's judgment on diagnostic tests, referrals, overall patient care, or how many patients are seen or how many hours are worked
• Control medical records
• Select, hire, or fire physicians and staff based on clinical competency
• Set payer contract parameters
• Make coding and billing decisions
• Approve the selection of medical equipment and supplies

Contract provisions that violate these rules are void. Management or asset-sale contracts with such investors also cannot bar a provider from competing after leaving the practice. Review every investor agreement against these limits with your attorney before signing.

Health and Safety Code 127507 also requires certain material transactions, including some involving MSOs, to be noticed to the Office of Health Care Affordability at least 90 days in advance. The thresholds and exemptions are something to confirm with the Office before you close any deal. Build that 90-day window into your timeline.

Step 5: Plan Medical Oversight, Delegation, and Staffing

This is where many med spa plans fail. Your treatment menu determines who may perform each procedure, under what level of supervision, and under what standardized procedure or delegation. Questions to resolve include:

• Which treatments may be performed by an RN, a physician assistant, a medical assistant, or a licensed vocational nurse, and under what supervision
• Whether a standardized procedure or delegated protocol must be in writing, and who signs it
• Who may operate lasers and other energy devices, and what training is required
• What the medical director must personally do, and how that role is compensated and documented

These answers depend on the specific treatment, and they are not settled by a general summary. Confirm them with the Medical Board of California, the Board of Registered Nursing, and a health care attorney. Do not assume that a non-physician staff member can perform a treatment just because a vendor says so, and do not assume the reverse either. Document the decision for each treatment.

Because staff are employees, you must also register with the Employment Development Department (EDD) once you hire. California's state minimum wage is $16.90 in 2026 and $17.40 beginning January 1, 2027 (verify this with the EDD or the Department of Industrial Relations before you set pay scales). Many cities set higher local minimums.

Step 6: Complete the Post-Formation Registrations

California has no general statewide business license. The Secretary of State issues no licenses or permits, and the CDTFA seller's permit is not a business license. Your registrations come from the entity filing, tax agencies, and local and professional licensing bodies.

• Fictitious business name (county). File with the county clerk within 40 days of starting business under a name other than the legal name. The county fee is the $10 statutory amount plus $2 for each additional name or owner, though counties often charge more, and newspaper publication is a separate cost. Publish once a week for four weeks, and the statement expires after five years. Details are at the Secretary of State's fictitious business names page.
• Seller's permit (CDTFA). Register with the CDTFA if you sell taxable goods, such as retail skincare products. The seller's permit is free. The statewide sales tax base is 7.25%, and with district taxes, city rates run from 7.25% to 11.75%. Resale certificates have no required form. Start at the CDTFA website.
• Local business tax or registration. Most cities charge a local business tax or registration certificate. Of 483 California cities, 445 report revenue from one, and there is no common formula, so the amount depends on the city. Counties license only regulated activities. Contact the city where the spa will operate before you sign a lease.
• Franchise tax (FTB). If the MSO is an LLC, it owes the $800 minimum annual franchise tax from its first year if it was organized or registered in 2024 through 2026. An LLC whose first taxable year begins in 2027, 2028, or 2029 pays $400 in year one under RTC 17941(g)(2), so confirm the first-year amount with the Franchise Tax Board. LLC fees apply once California-source total income reaches $250,000, $500,000, $1,000,000, or $5,000,000, at $900, $2,500, $6,000, or $11,790 respectively. A newly incorporated or qualified corporation or S corporation owes no $800 in its first taxable year. Corporate income tax is 8.84% for most corporations. Have your CPA model these figures for your structure.
• Build-out and contractor licensing. Build-out work is subject to contractor licensing once the job reaches the $1,000 threshold, counting labor and materials. Confirm the requirements with the Contractors State License Board, and confirm permits with your city building department.

Step 7: Confirm Your Professional and Treatment Licenses

Every clinician who performs a treatment needs a current California license issued by the appropriate board. Verify each one before the person starts. Keep a file for each license, and set reminders for renewal dates. Your medical director's license, the physicians who own the corporation, and any laser or device training should be documented in the same file. If the treatment plan includes regulated trades, such as electrology or certain aesthetic services, check with the relevant Department of Consumer Affairs board before you open.

Step 8: Insurance and Risk Management

Talk with a licensed insurance broker who places medical professional liability coverage. Ask about the policy limits, the treatments covered, and whether the coverage applies to the MSO as well as the medical corporation. Your attorney should review the management agreement's indemnification and insurance clauses. Insurance costs vary widely, so get quotes rather than relying on a general figure.

Expected Results and Marketing Claims

Med spa marketing needs to be as careful as the clinical setup. The FDA regulates claims about devices and drugs, so describe outcomes in hedged language. Say that a treatment may help reduce the appearance of lines, that results vary between individuals, and that most clients should expect a series of sessions. Avoid guarantees such as permanent results, and do not describe a device as treating a condition unless its clearance or approval covers that use. Ask your attorney to review every website page, promotion, and before-and-after photo.

Set realistic expectations with clients during consultation. Explain the expected onset, the likely duration, possible side effects, and when a follow-up visit is needed. Documenting this conversation protects both the client and your practice.

Common Mistakes to Avoid

• Forming an LLC to own the medical services. An LLC cannot render professional services. Use a professional corporation for the medical side.
• Giving investors control over clinical decisions. Investor rights that touch medical judgment, staffing by clinical competency, or billing decisions can void the contract.
• Assuming delegation works the same for every treatment. Each procedure has its own supervision rules. Write them down per treatment.
• Missing the annual Statement of Information. A corporation files every year, not every two years.
• Skipping the 90-day notice planning. If a transaction triggers Health and Safety Code 127507, the notice window affects your closing date.
• Ignoring local business tax. A state filing does not satisfy the city. Ask about the local business tax before you sign a lease.
• Launching with unverified marketing claims. Hedge every outcome statement and keep substantiation on file.

Open Questions to Confirm with Agencies and Advisors

Some details in this area are not settled by a general guide, and you should confirm them before you commit money:

• The Medical Board of California: the fictitious name permit process and fee, and the supervision rules for each injectable and laser treatment
• The Board of Registered Nursing: which nursing functions may be delegated, and under what written protocol
• The Office of Health Care Affordability: whether a planned transaction meets the Health and Safety Code 127507 notice thresholds, and which exemptions apply
• The Franchise Tax Board: the first-year franchise tax for any LLC whose first taxable year begins in 2027 through 2029
• Your city: the local business tax or registration certificate, and the zoning rules for medical use at the address
• Your health care attorney: the corporate structure, investor terms, and the medical director agreement

Next Steps

Start with the structure. Confirm the physician ownership model with a health care attorney, file the professional corporation, and then build the investor and management agreements around the limits above. Register with the CDTFA and EDD as your operations require, and add the local and professional licenses for each treatment. For free or low-cost business advising, the California Small Business Development Center network can help you organize your plan and identify the right advisors.