If you have been told that a physician and a nurse cannot co-own a clinical entity, that is true in several states and not true in Minnesota.
The Minnesota Professional Firms Act, chapter 319B, enacted in 1997, lets practitioners of certain licensed professions elect to operate as a professional firm in one of three forms: a corporation, a limited liability company, or a limited liability partnership. Under § 319B.40, health professionals — physicians, nurses, social workers, psychologists, therapists, podiatrists and others — may combine categories of service within a single firm.
Three conditions, all of which must hold
- The firm’s election specifies the categories of professional service it will provide.
- Every owner meets the ownership requirements of the Act.
- The relevant licensing statutes and rules specifically authorise those categories to be provided in combination.
That third condition is the one to check first, because it is the one that varies. Section 319B.40 does not itself authorise every pairing; it permits combination where the underlying licensing law already does. The question is always which combination, not whether combination is possible.
Why this is commercially useful
The recurring problem in aesthetics is retaining a lead clinician who is not a physician. In most states the answer is compensation, because equity in the medical entity is unavailable — Michigan requires every shareholder to render the same service, and Massachusetts requires physician majority ownership.
Minnesota gives you a lawful path to actual co-ownership across health professions, inside one firm, without inventing a structure. For a practice built around a nurse practitioner with a following, that is a materially different retention conversation.
The constraint that comes with it
Ownership interests may not be held, directly or indirectly, except by licensed and non-disqualified professionals, by qualifying general partnerships, or by other professional firms authorised to furnish at least one category of the service. Any other transfer is void — and that includes a transfer by will.
So the flexibility is horizontal, across professions, not vertical toward investors. A non-licensee still participates only through a separately owned management company.
Getting the election right
The election is not paperwork you file once and forget. It defines what the firm may provide. Adding a service category later means revisiting it, and adding an owner means checking them against the requirements again. Treat both as a standing item rather than a formation task.
Related reading
Frequently asked questions
Can a nurse and a physician co-own a practice in Minnesota?
Under § 319B.40 health professionals may combine categories of service within one professional firm, provided the election specifies them, every owner qualifies, and the licensing statutes authorise that combination.
What forms can a Minnesota professional firm take?
A corporation, a limited liability company, or a limited liability partnership.
Can an investor hold an interest?
No. Ownership is restricted to licensed non-disqualified professionals and qualifying firms; anything else is void.
Does 319B.40 authorise every combination?
No. It permits combination where the relevant licensing statutes and rules specifically authorise those categories to be provided together.
General information about Minnesota entity rules, not legal advice. Confirm your obligations with healthcare counsel licensed in Minnesota.