Key Takeaways

• AB 890 created two new NP categories: the 103 NP (practicing under a physician-signed standardized procedures framework, with expanded scope but not independent practice) and the 104 NP (full-practice authority after 4,600 transition-to-practice hours). Both categories require specific certifications, education, and regulatory approvals.
• 104 NPs can own California professional nursing corporations under Cal. Corp. Code § 13401.5. Nursing corporations render nursing services — which is not the same thing as rendering medical services.
• The CPOM analysis still governs any services that constitute the practice of medicine. Where an NP-owned practice renders services that constitute medicine (which many treatment-business services do), the clinical entity has to be a physician-owned professional medical corporation, not a nursing corporation.
• For non-licensee buyers, the acquisition structure depends on the target’s specific service mix and the practice-authority category of the NPs delivering care. NP-owned nursing corporations, NP-led practices under physician supervision, and NP-staffed practices owned by physicians each have different structural requirements.
• The DEA’s Fourth Temporary Extension (effective through December 31, 2026) allows 104 NPs with individual DEA registration to prescribe controlled substances via telemedicine without a prior in-person evaluation. This is directly relevant for NP-led ketamine, TRT/HRT, and controlled-substance-adjacent practices.

Buying an NP-Owned Practice in California: AB 890 Considerations for Non-Licensee Buyers

California’s AB 890, effective January 1, 2023, created full-practice authority for a specific category of nurse practitioners — the “104 NP”, and changed the analysis for who can own and operate a California healthcare practice. Traditional NPs (the “103 NP” category or lower) continue to practice under standardized procedures with a collaborating physician; 104 NPs, after completing a 4,600-hour transition-to-practice period and meeting other statutory requirements, can practice independently without physician supervision. Both categories can own California nursing corporations, but the question of what a nursing corporation can lawfully do is where the CPOM analysis and the AB 890 framework intersect in ways that non-licensee buyers routinely misread.

This post walks through the AB 890 framework, what NP ownership actually looks like in California healthcare, and how the analysis differs for buyers considering NP-owned or NP-led practices. It sits under the buyer pillar for the CPOM Acquisition & Remediation cluster.

The AB 890 Framework at a Glance

Before AB 890, California NPs practiced under standardized procedures signed by a collaborating physician (frequently called the medical director in the med spa and IV context). The standardized procedures defined the scope of delegated authority — which medications the NP could prescribe, which procedures the NP could perform, what evaluations the NP could conduct. Standardized procedures are governed by 16 CCR § 1474.

AB 890 (Ch. 265, Stats. 2020, effective January 1, 2023) added B&P §§ 2837.101, 2837.103, and 2837.104 to create expanded authority:

• 2837.103 — the “103 NP”. An NP who has completed the § 2837.103 requirements can practice within specific settings — organized health systems, group practices, clinics, and similar organized settings — under a “transition to practice” framework. The 103 NP practices with expanded authority but not full independence.
• 2837.104 — the “104 NP”. An NP who has completed § 2837.104 requirements — including 4,600 hours or three years of full-time practice in the § 2837.103 role, national certification, additional education, and Board of Registered Nursing approval — can practice independently in any setting without physician supervision. This is full-practice authority.

The specific transition, education, and approval requirements have been developed through Board of Registered Nursing rulemaking since 2023. The BRN maintains the practice-authority database and confirms individual NP status.

What Nursing Corporations Can Actually Do

Cal. Corp. Code § 13401.5(g) authorizes a “nursing corporation” for the practice of nursing. Nursing corporations have their own shareholder eligibility rules — the shareholders must be licensed registered nurses. Physicians (and specific allied professionals) can hold minority shares up to 49% collectively.

What a nursing corporation can render is nursing services. This distinction matters. Under California law, nursing practice and medical practice overlap in specific ways — NPs and other advanced practice nurses perform functions that traditionally were the exclusive province of physicians, but the entity framework still distinguishes.

For a nursing corporation to render services that would otherwise constitute the practice of medicine, the services have to be within the practice authority of the NPs (or other nurses) performing them. A 104 NP practicing under § 2837.104 in a nursing corporation can render services within full-practice authority. A 103 NP or traditional NP practicing in a nursing corporation renders services within the standardized procedures framework — which requires a physician’s involvement in developing and approving the standardized procedures.

Where a service falls outside the practice authority of the NPs performing it, the service constitutes the practice of medicine and cannot be rendered by a nursing corporation. It requires a physician-owned professional medical corporation.

For treatment-business acquisitions, the specific service mix drives the analysis. Med spa injectables, laser and IPL, IV therapy, hyperbaric administration, ketamine administration, GLP-1 prescribing, and TRT prescribing all sit at the interface of nursing and medical practice — some services may fit within 104 NP scope, others may not, and the specific standard of care for each service is fact-intensive.

The Three Practice Configurations a Buyer Sees

Configuration 1: 104 NP-owned nursing corporation. A full-practice-authority NP owns the professional nursing corporation that operates the practice. Clinical services fall within the 104 NP’s practice authority. No collaborating physician is required by AB 890, though the practice may still engage physicians for consultation or specific procedures outside NP scope.

Buyer diligence for this configuration: confirm the NP’s § 2837.104 status through the Board of Registered Nursing; confirm each service in the practice mix falls within 104 NP scope; confirm any Schedule III–V controlled-substance prescribing is supported by the NP’s individual DEA registration; and confirm the practice’s standardized procedures (still typically maintained even for 104 NP practices, and required for delegated RN functions) are current and specific.

Configuration 2: NP-led practice under physician supervision. A traditional NP or 103 NP leads day-to-day clinical operations under a physician’s collaborating role. The physician signs standardized procedures, provides consultation, and — for controlled-substance-adjacent practice — may or may not be involved depending on the delegation framework. The practice may be structured as a physician-owned PC (with the NP as a minority allied-professional shareholder under § 13401.5(a)(3) or as an employee), or as a nursing corporation with a physician collaborator.

Buyer diligence: confirm the standardized procedures framework meets 16 CCR § 1474; confirm the physician’s engagement is substantive (not paper); confirm each service in the practice mix has appropriate delegation authority; and confirm the entity structure matches the actual practice.

Configuration 3: NP-staffed practice owned by a physician-owned PC. The most common configuration for California med spas, IV clinics, and wellness practices. A physician owns the professional medical corporation; NPs are employees who perform delegated functions under standardized procedures. The practice’s ownership sits with the physician; the NPs deliver clinical care as employees.

Buyer diligence: this is the standard treatment-business diligence framework (Spokes #1, #7, #8 in this cluster address it in detail). The practice’s structure, medical director substance, GFE workflow, and standardized procedures are the load-bearing diligence issues.

What Changes for a Non-Licensee Buyer

For a non-licensee buyer, the acquisition structure depends on which configuration the target operates.

Buying a 104 NP-owned nursing corporation. The non-licensee buyer cannot own the nursing corporation directly — Cal. Corp. Code § 13401.5(g) requires nurse ownership. The acquisition structure is the friendly-nursing-corporation + MSO analog to the friendly-PC + MSO structure — the NP owns the nursing corporation, the buyer’s MSO acquires non-clinical assets and provides services under an MSA. The MSA has to preserve the NP’s clinical authority (analogous to preserving the physician’s authority in a physician-owned PC structure). SB 351’s specific PE and hedge fund provisions may or may not apply depending on the buyer’s capital source — the statute’s text focuses on physician and dental practices, but the underlying corporate practice doctrine reaches nursing.

Buying an NP-led practice under physician supervision. The acquisition structure depends on whether the target is owned by a physician-owned PC or a nursing corporation, and whether the buyer will preserve the current physician’s role or bring in a new physician-partner. If the target is a nursing corporation with a physician collaborator, the buyer’s structure may need to include either a nursing corporation (with the current NP or a new NP as shareholder) or a physician-owned PC (converting the underlying structure).

Buying an NP-staffed practice owned by a physician-owned PC. The standard non-licensee acquisition framework applies. The buyer’s structure includes a new physician-owned PC (as the standard cluster analysis explains); the NPs transition to employees of the new PC.

The buyer’s counsel should identify which configuration applies before the LOI structuring conversation. Getting this wrong at the LOI stage means restructuring later.

Controlled Substance Prescribing by 104 NPs

For NP-led practices in ketamine, TRT/HRT, GLP-1, and other controlled-substance-adjacent segments, the 104 NP’s ability to prescribe controlled substances is a load-bearing operational component.

Under 104 NP full-practice authority, an NP can prescribe Schedule II–V controlled substances subject to:

• Individual DEA registration. The 104 NP holds an active individual DEA registration for the schedules the NP prescribes.
• Federal Ryan Haight compliance. For telemedicine prescribing of controlled substances, the Ryan Haight Act framework applies. The DEA’s Fourth Temporary Extension — published December 31, 2025 and effective through December 31, 2026 — allows Schedule II–V controlled-substance prescribing via audio-video telemedicine without a prior in-person evaluation, provided all other federal and state requirements are met.
• California B&P § 2290.5. California permits Schedule III prescribing via real-time audio-video telehealth after establishing the provider-patient relationship. This runs alongside federal Ryan Haight.
• Facility DEA registration. Where the NP’s practice stores controlled substances at a physical location, the facility needs its own DEA registration tied to that address — separate from the NP’s personal DEA registration.
• CURES reporting. California’s PDMP requires reporting of controlled-substance prescriptions except for the AB 82 carve-out for testosterone (effective January 1, 2026).

For buyers of 104 NP-led practices in controlled-substance-adjacent segments, diligence should confirm each of these components. Practices that scaled through telemedicine-forward controlled-substance prescribing have specific business-continuity exposure tied to the December 31, 2026 expiration of the Fourth Temporary Extension.

Common Misconceptions

“AB 890 lets an NP own any practice.” An NP can own a nursing corporation. Whether the nursing corporation can render specific services depends on whether those services fall within the practice authority of the NPs delivering them. Services outside NP scope require a physician-owned PC.

“Adding a 104 NP to my LLC makes it compliant.” No. Cal. Corp. Code § 17701.04(e) prohibits LLCs from rendering professional services in California — nursing services and medical services alike. A 104 NP-owned business needs to be a nursing corporation, not an LLC.

“AB 890 eliminates the need for standardized procedures.” For 104 NPs practicing under full-practice authority in their own scope, no standardized procedures are required. But NP practices typically employ RNs (as well as other clinical staff) whose delegated functions are governed by standardized procedures under 16 CCR § 1474. Even 104 NP practices with NP-only clinical staff should typically maintain protocols documenting the practice’s clinical standards. Standardized procedures remain load-bearing for NP-led practices employing RN clinical staff.

“104 NP status = automatic DEA registration.” No. DEA registration is a separate application through federal DEA, and the NP has to meet DEA requirements for the schedules of controlled substances the NP prescribes.

“A 103 NP can practice independently in a med spa.” No. 103 NP practice authority is limited to specific organized settings — not solo practice or non-affiliated business settings. Many med spas that market as “NP-owned” are staffed by traditional NPs or 103 NPs under a physician collaborator’s standardized procedures — which is a specific delegation framework, not independent NP practice.

When to Bring Counsel Into the Diligence

Before the LOI is signed. NP-owned and NP-led practice acquisitions have specific structural considerations that don’t map cleanly to the standard physician-owned PC framework. Pre-LOI structural counsel can identify which configuration the target operates, what the buyer’s structure needs to look like, and how the acquisition documents should be drafted.

Bay Legal, PC represents non-licensee buyers of California treatment businesses — including NP-owned and NP-led practices, through pre-LOI structural counsel, CPOM and AB 890 diligence, and deal documentation. Call (650) 668-8000 or schedule a consultation at baylegal.com/contact.

Frequently Asked Questions

Can a 104 NP own a California medical practice?

A 104 NP can own a professional nursing corporation under Cal. Corp. Code § 13401.5(g). The nursing corporation can render nursing services and any services within the 104 NP’s full-practice authority. Services outside NP scope constitute the practice of medicine and require a physician-owned professional medical corporation. Whether the specific services a target practice offers fit within 104 NP scope is a fact-intensive analysis that depends on the service mix, the applicable standard of care, and the specific NP’s practice authority.

How is buying an NP-owned practice different from buying a physician-owned practice?

The entity structure differs — professional nursing corporation vs. professional medical corporation, with different shareholder eligibility rules. The regulatory oversight differs, Board of Registered Nursing vs. Medical Board of California. The clinical delegation framework differs, 104 NPs practice independently within their scope, while physicians can delegate more broadly to NPs and RNs. And SB 351’s specific PE and hedge fund provisions apply to physician and dental practices by statutory text, though the underlying corporate practice doctrine reaches nursing. The buyer’s structural analysis needs to address each of these differences.

Can a 104 NP prescribe controlled substances?

Yes, subject to specific requirements: individual DEA registration for the schedules the NP prescribes; federal Ryan Haight Act compliance for telemedicine prescribing; California B&P § 2290.5 compliance for telehealth; facility DEA registration for controlled-substance storage at any physical location; and CURES reporting where required. The DEA’s Fourth Temporary Extension (effective through December 31, 2026) allows Schedule II–V telemedicine prescribing without a prior in-person evaluation, which applies equally to 104 NPs and physicians. NP-led practices in ketamine, TRT/HRT, GLP-1, and other controlled-substance-adjacent segments have business-continuity exposure tied to the December 31, 2026 expiration.

Does buying an NP-owned nursing corporation trigger CPOM concerns?

The underlying corporate practice doctrine reaches nursing. A non-licensee buyer cannot own the nursing corporation directly — Cal. Corp. Code § 13401.5(g) requires nurse ownership. The compliant acquisition structure is the friendly-nursing-corporation + MSO analog to the friendly-PC + MSO structure, the NP owns the nursing corporation, the buyer’s MSO acquires non-clinical assets and provides services under a Management Services Agreement. The MSA has to preserve the NP’s clinical authority.

My target is an “NP-led” med spa staffed by traditional NPs. Is it a nursing corporation acquisition?

Not necessarily. Many “NP-led” practices are actually physician-owned professional medical corporations that employ NPs as clinical staff. The physician holds the ownership; the NPs deliver clinical care under standardized procedures. Some “NP-led” practices are structured as nursing corporations with a collaborating physician for standardized procedures. Some are structured as LLCs (which is non-compliant regardless of who leads clinical operations). Buyer diligence should identify which structure the target actually operates and price the deal accordingly.

Talk to a California Healthcare Acquisition Attorney

Bay Legal, PC represents non-licensee buyers of California treatment businesses — including NP-owned and NP-led practices, through pre-LOI structural counsel, CPOM and AB 890 diligence, and deal documentation. Call (650) 668-8000 or schedule a consultation at baylegal.com/contact.