Find out what business structure to use as a solo acupuncturist for your practice in California. We will explore the options and then go over some of the legal and tax implications.
What Are the Options?
In California, you can’t operate as an LLC if you’re an acupuncturist. You also can’t operate as a regular corporation. That leaves us with a few other options.
Option 1: you can operate as a sole-proprietorship.
Option 2: you can operate as a professional corporation
Option 3: you can operate as a professional corporation and elect to be taxed as a professional S-corporation
Option 1: Sole-Proprietorship
Operating as a sole-proprietorship is the easiest and most straightforward way to start as a solo acupuncturist. It is generally not recommended for growing practices because of the personal liability and lack of tax advantages available as a sole-proprietor.
As a sole-proprietorship, there’s no differentiation between you and your business from a legal standpoint. There is no personal liability or personal asset protection to the owner. In other words, your personal assets could be seized to satisfy the claims, liabilities, and legal judgements against the practice.
For these reasons, sole-proprietorships are only recommended for owners who are not expecting to grow their profits, hire employees, and who are not worried about personal liability or protecting their personal assets.
Option 2: Professional Corporation
In California, licensed acupuncturists are not permitted to form LLCs. Instead, the primary entity option available is a Professional Corporation (PC).
A Professional Corporation creates a legal separation between you and your practice, offering significantly more liability protection than operating as a sole-proprietor. While it does not protect you from malpractice related to your own clinical work, it can shield your personal assets from many business-related liabilities, such as lease disputes, vendor contracts, or employee issues.
For California acupuncturists who want to grow a sustainable practice, a PC is often the most appropriate long-term structure.
Option 3: Professional Corporation Taxed as an S-Corporation
By default, a Professional Corporation is taxed as a C-Corporation, which is rarely ideal for solo practitioners due to double taxation. However, most solo acupuncturists elect to have their PC taxed as an S-Corporation.
When a PC is taxed as an S-Corporation, you are required to pay yourself a reasonable salary subject to payroll taxes. Any remaining profit can be distributed to you as owner distributions, which are not subject to self-employment tax. This structure can lead to substantial tax savings once the practice reaches consistent profitability.
It’s important to note that S-Corporations come with increased compliance requirements, including payroll, quarterly filings, and stricter bookkeeping standards. That having been said, because of C-Corp double taxation, a PC taxed as an S-Corporation is the best way to go in most cases.
Sole-Proprietor vs. Professional Corporation in California
Many California acupuncturists begin as sole-proprietors because it is simple and inexpensive. However, remaining a sole-proprietor long-term exposes you to unnecessary legal risk and limits your ability to optimize taxes as your income grows.
A Professional Corporation provides:
Clear separation between personal and business finances
Improved credibility with landlords, lenders, and insurers
Access to advanced tax planning strategies through S-Corporation election
For most growing California acupuncturists, transitioning from a sole-proprietorship to a PC is a natural and strategic step.
Choosing the Right Time to Incorporate
Forming a Professional Corporation too early can be just as problematic as waiting too long. The ideal timing depends on factors such as:
Net income consistency
Growth plans (additional providers, associates, or locations)
Risk exposure
Ability to maintain payroll and compliance requirements
It’s important to consult with a competent business attorney and tax advisor in to navigate your options and the right timing to make the right change.
Bottom Line for California Acupuncturists
While sole-proprietorships are common starting points, they are rarely the best long-term solution for California acupuncturists. Because LLCs are not permitted, a Professional Corporation—often taxed as an S-Corporation—is the most common and effective structure once your practice is established.
Making the right entity decision at the right time can reduce taxes, protect your personal assets, and position your practice for sustainable growth.
Need Help Choosing the Right Entity?
Choosing the right business structure—and knowing when to make a change—can have a significant impact on your taxes, liability, and long-term growth.
At Odyssey Accounting, we work with California acupuncturists to evaluate entity structure, S-Corporation eligibility, and tax-saving opportunities based on real numbers—not generic rules of thumb.
If you’re operating as a sole-proprietor or unsure whether a Professional Corporation makes sense for your practice, we can help you make an informed decision.
Schedule a consultation below to review your current setup and determine the most tax-efficient path forward.