American Academy of Nurse Entrepreneurs

APRN Owners Can Form an LLC in Texas (and this is a good thing!)

Texas has some contradictory laws. This should come as no surprise. Chapter 301 of the Business Organizations Code, “Provisions Relating to Professional Entities” is a quintessential Texas example of Texas contradiction. But for once this contradiction plays in favor of APRNs.

Based on a logical reading, APRNs should be included as an “authorized person” who must operate under a PLLC/PC based on several definitions in the law,

“(8)  “Professional service” means any type of service that requires, as a condition precedent to the rendering of the service, the obtaining of a license in this state, including the personal service rendered by an architect, attorney, certified public accountant, dentist, physician, public accountant, or veterinarian.”

Yet APRNs are never specifically mentioned in the law. The law goes into great depths on the ownership abilities of PAs, which are frankly very restrictive. PAs are prevented them from being officers or contracting with the physicians. Essentially, they can be shareholders without decision making authority (301.012 a-1).

The law even widens the inclusive PLLC/PC ownership to include nearly every other licensed medical professional type:

“301.012 (b)  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 may form a professional entity that is jointly owned by those practitioners to perform professional services that fall within the scope of practice of those practitioners.”

Again, APRNs never mentioned. This is where things get even more convoluted. Earlier, the law defines licensed mental health professionals as,

“301.003 (1)  “Licensed mental health professional” means a person, other than a physician, who is licensed by the state to engage in the practice of psychology or psychiatric nursing or to provide professional therapy or counseling services.”

So, maybe a psychiatric mental health NP falls under this law. Having fun yet? Finally, the law mentions “nurses” only one additional time in reference to being employed [not owning] a PLLC/PC,

“301.006 (d)  This section may not be construed to prohibit a professional entity or foreign professional entity from employing  nurses or from employing individuals who do not, according to general custom and practice, ordinarily provide a professional service, including clerks, secretaries, bookkeepers, technicians, or assistants.  To the extent this subsection conflicts with any other law, this subsection controls.”

Now, we’re all sufficiently confused. This is a horribly written law. An employee of the Texas Secretary of State’s office operating by the letter of the law likely reads all of this this to preclude APRNs. Yet, a more practical/logical employee may interpret that APRNs should be included.

APRNs, don’t bother struggling with this! Owning a LLC is a much better option. You avoid all the cumbersome ownership and officer restrictions. You can raise funds or have non-licensed owners or co-founders! This is all good news. Physicians and PAs are legally mandated to form more cumbersome PLLCs or PCs. Thanks to incompetent law, Texas APRNs get to avoid this burden entirely.

Go forth and form LLCs!

The materials provided by AANE in this group or on our website are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an attorney-client relationship.

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