Tenn. Comp. R. & Regs. 1155-02-.21 - PODIATRIC PROFESSIONAL CORPORATIONS AND PODIATRIC PROFESSIONAL LIMITED LIABILITY COMPANIES

Current through March 20, 2022

(1) Podiatric Professional Corporations (PPC) - Except as provided in this rule Podiatric Professional Corporations shall be governed by the provisions of Tennessee Code Annotated, Title 48, Chapter 101, Part 6.
(a) Filings - A PPC need not file its Charter or its Annual Statement of Qualifications with the Board.
(b) Ownership of Stock - With the exception of the health care professional combinations specifically enumerated in Tennessee Code Annotated, Section 48-101-610 only the following may form and own shares of stock in a foreign or domestic PPC doing business in Tennessee:
1. Podiatrists, orthotists, prosthetists, and pedorthists licensed pursuant to Tennessee Code Annotated Title 63, Chapter 3 or licensed in another state; and/or
2. A foreign or domestic general partnership, PPC or PPLLC in which all partners, shareholders, members or holders of financial rights are either:
(i) Podiatrists, orthotists, prosthetists, and pedorthists licensed pursuant to Tennessee Code Annotated Title 63, Chapter 3 in Tennessee or podiatrists, orthotists, prosthetists, and pedorthists licensed by other states, or composed of entities which are directly or indirectly owned by such licensed podiatrists; and/or
(ii) Professionals authorized by Tennessee Code Annotated, Sections 48-101-610, 48-248-401, or 48-249-1109 to either own shares of stock in a PPC or be a member or holder of financial rights in a PPLLC; and/or
(iii) A combination of professionals authorized by subparts (i) and (ii).
(c) Officers and Directors of Podiatric Professional Corporations -
1. All, except the following officers, must be persons who are eligible to form or own shares of stock in a podiatric professional corporation as limited by T.C.A. § 48-101-610(d) and subparagraph (1) (b) of this rule:
(i) Secretary;
(ii) Assistant Secretary;
(iii) Treasurer; and
(iv) Assistant Treasurer.
2. With respect to members of the Board of Directors, only persons who are eligible to form or own shares of stock in a podiatric professional corporation as limited by T.C.A. § 48-101-610(d) and subparagraph (1) (b) of this rule shall be directors of a PPC.
(d) Practice Limitations
1. Engaging in, or allowing another podiatric incorporator, shareholder, officer, or director, while acting on behalf of the PPC, to engage in, podiatric practice in any area of practice or specialty beyond that which is specifically set forth in the charter may be a violation of the professional ethics enumerated in Rule 1155-02-.13 and/or Tennessee Code Annotated, Section 63-3-119(a) (4).
2. Nothing in these rules shall be construed as prohibiting any health care professional licensed pursuant to Tennessee Code Annotated, Title 63 from being an employee of or a contractor to a PPC.
3. Nothing in these rules shall be construed as prohibiting a PPC from electing to incorporate for the purposes of rendering professional services within two (2) or more professions or for any lawful business authorized by the Tennessee Business Corporations Act so long as those purposes do not interfere with the exercise of independent podiatric judgment by the podiatric incorporators, directors, officers, shareholders, employees or contractors of the PPC who are practicing podiatry as defined by Tennessee Code Annotated, Section 63-3-101.
4. Nothing in these rules shall be construed as prohibiting a podiatrist from owning shares of stock in any type of professional corporation other than a PPC so long as such ownership interests do not interfere with the exercise of independent podiatric judgment by the podiatrist while practicing podiatry as defined by Tennessee Code Annotated, Section 63-3-101.
(2) Podiatric Professional Limited Liability Companies (PPLLC) - Except as provided in this rule Podiatric Professional Limited Liability Companies shall be governed by either the provisions of Tennessee Code Annotated, Title 48, Chapters 248 or 249.
(a) Filings - Articles filed with the Secretary of State shall be deemed to be filed with the Board and no Annual Statement of Qualifications need be filed with the Board.
(b) Membership - With the exception of the health care professional combinations specifically enumerated in Tennessee Code Annotated, Sections 48-248-401 and 48-249-1109 only the following may be members or holders of financial rights of a foreign or domestic PPLLC doing business in Tennessee:
1. Podiatrists, orthotists, prosthetists, and pedorthists licensed pursuant to Tennessee Code Annotated Title 63, Chapter 3 or licensed in other states; and/or
2. A foreign or domestic general partnership, PPC or PPLLC in which all partners, shareholders, members or holders of financial rights are either:
(i) Podiatrists, orthotists, prosthetists, and pedorthists licensed pursuant to Tennessee Code Annotated Title 63, Chapter 3 in Tennessee or podiatrists, orthotists, prosthetists, and pedorthists licensed by other states or composed of entities which are directly or indirectly owned by such licensed podiatrists; and/or
(ii) Professionals authorized by Tennessee Code Annotated, Sections 48-101-610, 48-248-401 or 48-248-1109 to either own shares of stock in a PPC or be a member or holder of financial rights in a PPLLC; and/or
(iii) A combination of professionals authorized by subparts (i) and (ii).
(c) Managers, Directors or Governors of a PPLLC
1. All, except the following managers, must be persons who are eligible to form or become members or holders of financial rights of a podiatric professional limited liability company as limited by T.C.A. § 48-248-401 and subparagraph (2) (b) of this rule:
(i) Secretary
(ii) Treasurer
2. Only persons who are eligible to form or become members or holders of financial rights of a podiatric professional limited liability company as limited by T.C.A. § 48-248-401 and subparagraph (2) (b) of this rule shall be allowed to serve as a director, or serve on the Board of Governors of a PPLLC.
(d) Practice Limitations
1. Engaging in, or allowing another podiatrist member, officer, manager, director, or governor, while acting on behalf of the PPLLC, to engage in, podiatric practice in any area of practice or specialty beyond that which is specifically set forth in the articles of organization may be a violation of the professional ethics enumerated in Rule 1155-02-.13 and/or Tennessee Code Annotated, Section 63-3-119(a) (4).
2. Nothing in these rules shall be construed as prohibiting any health care professional licensed pursuant to Tennessee Code Annotated, Title 63 from being an employee of or a contractor to a PPLLC.
3. Nothing in these rules shall be construed as prohibiting a PPLLC from electing to form for the purposes of rendering professional services within two (2) or more professions or for any lawful business authorized by the Tennessee Limited Liability Company Act or the Tennessee Revised Limited Liability Company so long as those purposes do not interfere with the exercise of independent podiatric judgment by the podiatrist members or holders of financial rights, governors, officers, managers, employees or contractors of the PPLLC who are practicing podiatry as defined by Tennessee Code Annotated, Section 63-3-101.
4. Nothing in these rules shall be construed as prohibiting a podiatrist from being a member of any type of professional limited liability company other than a PPLLC so long as such membership interests do not interfere with the exercise of independent podiatric judgment by the podiatrist while practicing podiatry as defined by Tennessee Code Annotated, Section63-3-101.
5. All PPLLCs formed in Tennessee pursuant to Tennessee Code Annotated, Sections 48-248-104 or 48-249-1104, to provide services only in states other than Tennessee shall annually file with the Board a notarized statement that they are not providing services in Tennessee.
(3) Dissolution - The procedure that the Board shall follow to notify the attorney general that a PPC or a PPLLC has violated or is violating any provision of Title 48, Chapters 101, 248 or 249, shall be as follows but shall not terminate or interfere with the secretary of state's authority regarding dissolution pursuant to Tennessee Code Annotated, Sections48-101-624, 48-248-409, or 48-249-1122.
(a) Service of a written notice of violation by the Board on the registered agent of the PPC and/or PPLLC or the secretary of state if a violation of the provisions of Tennessee Code Annotated, Title 48, Chapters 101, 248 and/or 249 occurs.
(b) The notice of violation shall state with reasonable specificity the nature of the alleged violation(s).
(c) The notice of violation shall state that the PPC and/or PPLLC must, within sixty (60) days after service of the notice of violation, correct each alleged violation or show to the Board's satisfaction that the alleged violation(s) did not occur.
(d) The notice of violation shall state that, if the Board finds that the PPC and/or PPLLC is in violation, the attorney general will be notified and judicial dissolution proceedings may be instituted pursuant to Tennessee Code Annotated, Title 48.
(e) The notice of violation shall state that proceedings pursuant to this section shall not be conducted in accordance with the contested case provisions of the Uniform Administrative Procedures Act, compiled in Title 4, Chapter 5 but that the PPC and/or PPLLC, through its agent(s), shall appear before the Board at the time, date, and place as set by the Board and show cause why the Board should not notify the attorney general and reporter that the organization is in violation of the Act or these rules. The Board shall enter an order that states with reasonable particularity the facts describing each violation and the statutory or rule reference of each violation. These proceedings shall constitute the conduct of administrative rather than disciplinary business.
(f) If, after the proceeding the Board finds that a PPC and/or PPLLC did violate any provision of Title 48, Chapters 101 and/or 248 or these rules, and failed to correct said violation or demonstrate to the Board's satisfaction that the violation did not occur, the Board shall certify to the attorney general and reporter that it has met all requirements of either Tennessee Code Annotated, Sections 48-101-624(1) - (3) and/or 48-248-409(1)-(3) and/or 48-249-101, et seq.
(4) Violation of this rule by any podiatrist individually or collectively while acting as a PPC or as a PPLLC may subject the podiatrist(s) to disciplinary action pursuant to Tennessee Code Annotated, Section 63-3-119(4).
(5) The authority to own shares of stock or be members or holders of financial rights in a PPC or a PPLLC granted by statute or these rules to professionals not licensed in this state shall in no way be construed as authorizing the practice of any profession in this state by such unlicensed professionals.

Notes

Tenn. Comp. R. & Regs. 1155-02-.21
Original rule filed September 15, 2004; effective November 29, 2004. Amendment filed March 23, 2007; effective June 6, 2007.

Authority: T.C.A. §§ 4-5-202, 4-5-204, 48-101-605, 48-101-608, 48-101-610, 48-101-618, 48-101-624, 48-101-628, 48-101-629, 48-101-630, 48-248-104, 48-248-202, 48-248-401, 48-248-404, 48-248-409, 48-248-501, 48-248-601, 48-248-602, 48-248-603, 48-249-101, et seq., 63-3-106, 63-3-110, and 63-3-119.

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