Oregon Administrative Rules
Chapter 811 - BOARD OF CHIROPRACTIC EXAMINERS
Division 10 - GENERAL RULES AND LICENSING
Section 811-010-0120 - Chiropractic Professional Corporation and Business Entity Majority Ownership
Universal Citation: OR Admin Rules 811-010-0120
Current through Register Vol. 63, No. 9, September 1, 2024
(1) Definitions. As used in this rule, unless the context requires otherwise:
(a) "Business entity" means:
(A) A professional corporation organized
under ORS Chapter 58, predecessor law, or comparable law of another
jurisdiction;
(B) A limited
liability company organized under ORS Chapter 63 or comparable law of another
jurisdiction;
(C) A partnership
organized in Oregon after January 1, 1998, or that is registered as a limited
liability partnership, or that has elected to be governed by ORS Chapter 67 or
comparable law of another jurisdiction; or
(D) A limited partnership organized under ORS
Chapter 70, predecessor law, or comparable law of another
jurisdiction.
(b)
"Majority ownership interest" means more than 50 percent of:
(A) The issued voting stock of a professional
corporation;
(B) The members of a
limited liability company; or
(C)
Participation in the profits of a partnership.
(c) "Organizational document" means:
(A) The articles of incorporation of a
professional corporation, or comparable document of another
jurisdiction;
(B) The articles of
organization of a limited liability company, or comparable document of another
jurisdiction;
(C) The partnership
agreement and, for a limited liability partnership, its registration, or
comparable document(s) of another jurisdiction; or
(D) A certificate of limited partnership, or
comparable document of another jurisdiction.
(d) "Owner" means a voting shareholder of a
professional corporation, member of a limited liability company, or partner of
a partnership.
(e) "Principal"
means a person who is a director of a professional corporation, manager of a
limited liability company, or general partner of a limited
partnership.
(f) "Surrogate" means
a person appointed to act for another; deputy.
(2) The purpose of this rule is to protect the public by ensuring that business entities are organized for the purpose of providing chiropractic health care by majority owned and controlled Oregon licensed chiropractic physicians and/or chiropractic health care in a multi-disciplinary setting which are majority owned and controlled by Oregon licensed health care professionals.
(a) In a
business entity organized for the purpose of practicing chiropractic:
(A) The majority ownership interest shall be
held by chiropractic physicians licensed in this state to practice
chiropractic.
(B) A majority of the
principals shall be chiropractic physicians who are licensed in this state to
practice chiropractic.
(C) All
officers except the secretary and treasurer, if any, must be chiropractic
physicians who are licensed in this state to practice chiropractic. Any two or
more offices may be held by the same person.
(b) A professional corporation may be a
shareholder of a professional corporation organized for the purpose of
practicing chiropractic solely for the purpose of effecting a reorganization as
defined in the Internal Revenue Code.
(c) The Board has the discretion to allow
business entities to apply for a waiver of the majority ownership requirement
provided full disclosure of clinic ownership is provided to the Board, a plan
and timetable is presented for a transition to meet the requirements of this
rule, and the Board finds that the health and welfare of the patient is the
first priority of the chiropractic physicians and business entity.
(d) Upon a finding that a holder or owner of
a chiropractic practice has failed to comply with the provisions of this rule
or the regulations prescribed by the Board pursuant to the practice of
chiropractic, the Board may consider the failure to comply a violation which
may subject a holder or owner to discipline pursuant to ORS
684.100.
(3) It shall be considered unprofessional conduct for a licensee to own or operate a clinic or practice as a surrogate for, or be employed by, an individual or entity who could otherwise not own and/or operate a chiropractic clinic under this rule.
(4) Powers of professional corporations organized to practice chiropractic.
(a) A
professional corporation organized for the purpose of practicing chiropractic
has the powers enumerated in ORS
60.077 and
60.081, except as provided
otherwise by the Board.
(b) A
general corporation under the provisions of ORS Chapter 60 may not be organized
to practice chiropractic.
(5) Proxies.
(a) A proxy to exercise voting rights in a
business entity organized for the purpose of practicing chiropractic may be
given under the following conditions:
(A) If
the voting rights belong to a chiropractic physician licensed in this state to
practice chiropractic, the proxy may be given only to an owner of the same
business entity who is also a chiropractic physician licensed in this state to
practice chiropractic, or to an attorney licensed in this state to practice
law.
(B) If the voting rights do
not belong to a chiropractic physician licensed in this state to practice
chiropractic, the proxy may be given only to another owner of the same business
entity whether or not the other owner is a chiropractic physician licensed in
this state to practice chiropractic, or to an attorney licensed in this state
to practice law.
(b) No
voting trust may be created to exercise the voting rights of one or more owners
of a business entity organized for the purpose of practicing
chiropractic.
(c) Two or more
persons with voting rights in a business entity organized for the purpose of
practicing chiropractic may enter into a voting agreement provided that the
voting agreement does not transfer voting rights from an individual who is a
chiropractic physician licensed in this state to practice chiropractic to an
individual who is not so licensed. Notwithstanding any provision of this
subsection, voting rights may be transferred to an attorney licensed in this
state to practice law.
(6) Acquisition and disposition of ownership interest.
(a) Persons with an ownership
interest in a business entity organized for the purpose of practicing
chiropractic may acquire, transfer, assign, or dispose of such ownership
interest only in a manner that leaves the business entity in compliance with
the provisions of this rule.
(b) If
the majority ownership interest of a business entity organized for the purpose
of practicing chiropractic is no longer held by chiropractic physician(s)
licensed in this state to practice chiropractic due to such ownership interest
being held by an administrator, executor, personal representative, guardian,
conservator, or receiver of the estate of a former owner, or by a transferee
who receives such ownership interest by operation of law or court decree, such
administrator, executor, personal representative, guardian, conservator,
receiver, or transferee may act in the same ownership capacity as the former
owner, including acting in the former owner's capacity as principal or officer,
until the ownership requirements are in compliance with the provisions of this
rule, but not to exceed six months following receipt or transfer of such
ownership interest.
(c) Subject to
subsection (a) of this section, the organizational document, bylaws, or
agreements among owners of a business entity organized for the purpose of
practicing chiropractic may provide limitations on the ability to acquire,
transfer, assign or dispose of an ownership interest in the business
entity.
(d) Subject to subsection
(a) of this section, the articles of incorporation, bylaws, or agreements among
shareholders of a professional corporation may provide for the purchase or
redemption of shares by the corporation.
(7) Disqualification of chiropractic physician; disposition of ownership interest.
(a) If a chiropractic physician practicing
chiropractic on behalf of a business entity is disqualified from practicing
chiropractic for more than six months or assumes a public office, the duties of
which prohibit practicing chiropractic for more than six months under the rules
of the Board or other law, within 60 days after the disqualification or
prohibition, the chiropractic physician's ownership interest shall be disposed
of in accordance with section (6); or
(A) In
the case of a professional corporation, the corporation shall have the right to
redeem the shares of the chiropractic physician;
(B) In the case of a limited liability
company, the chiropractic physician shall cease to be a member by withdrawal or
expulsion;
(C) In the case of a
partnership, the chiropractic physician shall cease to be a partner by
withdrawal, dissociation or expulsion.
(b) If the disposition of ownership interest
under subsection (a) of this section results in less than majority ownership of
the business entity by chiropractic physicians licensed in this state to
practice chiropractic, the business entity shall have six months from the date
of disqualification or prohibition to come into compliance with the majority
ownership provisions of this rule.
(c) If a chiropractic physician practicing
chiropractic on behalf of a business entity is disqualified from practicing
chiropractic for six months or less or assumes a public office, the duties of
which prohibit practicing chiropractic for six months or less under the rules
of the Board of Chiropractic Examiners or other law, the chiropractic physician
may retain interest in the business entity and may remain a principal of the
business entity during the period of disqualification or prohibition, unless
otherwise prohibited under the rules of the Board of Chiropractic Examiners or
by law.
(8) Disposition of ownership interest upon death of owner.
(a)
A business entity organized for the purpose of practicing chiropractic may
provide for the disposition of the ownership interest of a deceased owner in
the organizational document, in the bylaws, by agreement between owners or
between the business entity and its owners, providing such disposition leaves
the business entity in compliance with the provisions of this rule.
(b) If there is no provision for the
disposition of a deceased owner's interest as described in subsection (a) of
this section, the ownership interest shall be disposed of in any manner that
leaves the business entity in compliance with the provisions of this rule and
the laws of this state.
(c) If the
ownership interest of a deceased owner is not disposed of within twelve months
after the owner's death, a special meeting of the remaining owners shall be
called within fourteen months after the owner's death to decide by vote of the
remaining owners whether the business entity shall dispose of such ownership
interest in accordance with the provisions of this rule, or whether the
business entity shall be voluntarily dissolved. The action determined to be
taken by the remaining owners shall be completed within eighteen months after
the owner's death. The Board may grant an extension of this time period upon
request.
(d) If the deceased owner
of a business entity organized for the purpose of practicing chiropractic was
the sole owner of the business entity at the time of death:
(A) The business entity shall cease the
practice of chiropractic as of the date of the owner's death unless it has
retained the services of another chiropractic physician licensed in this state
to practice chiropractic.
(B)
Notwithstanding section (2)(c) of this rule, within twelve months after the
date of the owner's death, the business entity shall be dissolved unless the
ownership interest of the deceased owner has been sold or assigned to one or
more chiropractic physicians who are licensed in this state to practice
chiropractic.
Statutory/Other Authority: ORS 58 & 684
Statutes/Other Implemented: ORS 58.367 & 684.155(1)(b)
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