CPOM Compliance for Arkansas Healthcare Startups
Arkansas is more flexible than California on classic CPOM, but A.C.A. § 4-29-307 still limits who may own, manage, or control a medical corporation, and § 4-29-309 still requires an Arkansas State Medical Board certificate before the corporation may operate.
Get a Free CPOM AssessmentThe law in Arkansas
Key authorities (official text)
Arkansas State Medical Board · Medical Corporation Act A.C.A. § 4-29-301 et seq. · Medical Practices Act § 17-95-201 et seq.Arkansas State Medical Board · Arkansas General Assembly · SB 262 (2025, quoting § 4-29-307).
Arkansas CPOM is Moderate. The state does not copy California Business & Professions Code § 2400. Official A.C.A. § 4-29-307, as quoted in the 2025 General Assembly’s SB 262 engrossment: all of the officers, directors, and shareholders of a corporation subject to the Medical Corporation Act shall at all times be persons licensed pursuant to the Arkansas Medical Practices Act, § 17-95-201 et seq., § 17-95-301 et seq., and § 17-95-401 et seq. Official (b): no person who is not so licensed shall have any part in the ownership, management, or control of the corporation, nor may any proxy to vote any shares of the corporation be given to a person who is not so licensed. Little Rock diligence still wants a physician-owned PC plus a fair-market-value MSA.
Do not cite the absence of a California-style standalone ban as permission for a lay operating company to practice medicine. A.C.A. § 4-29-305 lets one or more persons licensed under the Medical Practices Act associate to form a corporation to own, operate, and maintain an establishment for the study, diagnosis, and treatment of human ailments. Official (b): medical or surgical treatment, consultation, or advice may be given by employees of the corporation only if they are licensed under that Act. That is a licensed-practice rule, not a digital-health waiver.
Do not skip the Board certificate. A.C.A. § 4-29-309(a): no corporation shall open, operate, or maintain an establishment for any of the purposes set forth in § 4-29-305 without a certificate of registration from the Arkansas State Medical Board. The Board issues the certificate if the incorporators, officers, directors, and shareholders are each licensed, no disciplinary action is pending, and the corporation will be conducted in compliance with law. The certificate remains effective until January 1 following the date of registration and must be renewed. A.C.A. § 4-29-304 preserves the physician-patient relationship. A medical-director title on a Delaware company does not satisfy that overlay. Collaboration for NPs/PAs is a different job from owning the Professional Corporation. See collaborating physician vs physician PC owner.
Typical PC / MSO structure in Arkansas
Form an Arkansas medical corporation under A.C.A. § 4-29-301 et seq. owned by an Arkansas-licensed MD or DO. Keep the § 4-29-309 Board certificate current. The MSO, often the Delaware operating company, provides non-clinical services under a written MSA at fair market value. Clinical revenue lands in the PC. Foundry forms that structure ($15,000) and matches a friendly PC owner ($3,000/mo). Not a rented Super PC. Not a reading of SB 262 as a substitute for a named licensed owner on a venture-backed file.
If you also treat Oklahoma, Louisiana, Texas, Missouri, or Tennessee patients, Arkansas’s Moderate label does not control those states. Start with the CPOM 50-state guide and form for the footprint you actually have. Neighboring Oklahoma, Louisiana, Texas, Missouri, and Tennessee have their own statutes.
When you still need a PC vs only an MSO
Use the table as an operator rule, not a filing opinion. Confirm with counsel.
| Arkansas fact pattern | Typical entity | Why |
|---|---|---|
| Arkansas-only, cash-pay, physician already owns the practice | May stay on the existing medical corporation | Still keep the § 4-29-309 certificate current and document FMV admin if an MSO is in the picture |
| Venture-backed or multi-state telehealth that includes Little Rock / Fayetteville / Northwest Arkansas | Arkansas medical corporation + FMV MSA | Buyers and payers test CPOM compliance the same way they do in strict states |
| Cite SB 262 as a lay-ownership path | Do not | 2025 session language on inactive/retired licensees, not a startup waiver. Confirm enactment with counsel |
| Arkansas plus Oklahoma, Louisiana, Texas, Missouri, or Tennessee | Form for the neighboring states you treat, then qualify Arkansas | Arkansas’s Moderate label does not soften 18 O.S. § 809, La. R.S. 12:901, or Texas Occupations Code |
Fee-splitting and funds-flow risk
Arkansas State Medical Board discipline plus § 4-29-307 (ownership, management, or control) is the corporate-practice overlay. A percentage-of-collections management fee is the pattern that looks most like a split of professional fees and like de facto control. Prefer a fixed or FMV-supported admin fee. Pair Arkansas CPOM with the fee-risk table on CPOM compliance.
| Arkansas pattern | Risk | Safer pattern |
|---|---|---|
| Lay LLC holds itself out as practicing medicine | High: § 4-29-307 + Medical Practices Act overlay | Licensed-physician ownership of the medical corporation |
| MSO paid % of professional collections | High: diligence + fee-split overlay | Fixed FMV admin fee with a memo |
| Operate without a § 4-29-309 certificate | High: statutory open/operate bar | Keep the Board certificate current and renewed |
| Lay equity or unlicensed proxy in the medical corporation | High: § 4-29-307(b) | Licensed-physician ownership, management, and voting |
| Physician PC + FMV MSA + separate books | Base case | Revisit FMV when volume changes |
Board vs buyer / payer checks
The Arkansas State Medical Board disciplines licensees and issues the § 4-29-309 certificate. Buyers and payers run a different file. Use both columns. License risk and diligence risk are not the same test. Full operating map: CPOM compliance.
| Who checks | What they sample | Arkansas fail signal |
|---|---|---|
| Arkansas State Medical Board | § 4-29-309 certificate; licensed officers/directors/shareholders under § 4-29-307 | Figurehead PC owner; MSO writing protocols; unlicensed holding-out; lapsed certificate |
| Buyer diligence | Shareholder ledger vs Secretary of State vs Board certificate; one claim from payer to PC bank to MSA invoice | MSO lockbox; percentage MSA; no Arkansas-licensed owner |
| Payer / credentialing | Claim TIN and group NPI on the physician-owned PC | Marketing MSO TIN on the claim |
What Arkansas founders need to know
- Arkansas is Moderate, not “no CPOM.” § 4-29-307 is the owner/control rule; § 4-29-309 is the Board certificate.
- § 4-29-307(b) bars unlicensed ownership, management, control, and voting proxies. That is broader than a share-ledger test.
- SB 262 (2025) is proposed session language on inactive/retired licensees. Confirm enactment. It is not a lay-MSO waiver.
- Little Rock / Northwest Arkansas health-tech diligence still asks who owns the PC, who bills, and how the MSA is priced.
- Foundry does not drop clients into a plug-in 50-state PC. Multi-state needs a 50-state licensed physician.
Operational checklist: CPOM compliance. Setup path: MSO-PC formation ($15,000). Full map: CPOM 50-state guide. Book a call from the homepage.
Arkansas CPOM FAQ
Does Arkansas have CPOM?
Arkansas is Moderate / more flexible than California or New York. There is no B&P § 2400 analogue. A.C.A. § 4-29-307 and § 4-29-309 still expect licensed control of medicine and a current Board certificate. Foundry keeps Arkansas as Moderate on the CPOM 50-state guide.
Do I still need an MSO-PC in Arkansas?
Yes for most venture-backed and multi-state models. The professional entity holds clinical care; the MSO is paid fair market value for non-clinical services.
Does A.C.A. § 4-29-307 let a lay LLC own a medical corporation?
No. All officers, directors, and shareholders must be licensed under the Medical Practices Act. Unlicensed persons may not own, manage, control, or hold a voting proxy.
Does SB 262 let a retired physician keep medical-corporation stock?
SB 262 proposed that path in the 2025 session. Treat it as proposed language until counsel confirms enactment. It is not a digital-health waiver for lay ownership.
How does Foundry help with Arkansas CPOM?
MSO-PC formation is $15,000 one-time. An Arkansas-licensed physician PC owner is $3,000/mo. Foundry is not a law firm.