Disclaimer: This article is provided for informational purposes only and is based on research into state laws and regulations. It is not legal advice. Laws vary by state, and they change over time. Before making any decisions about ownership structure, entity type, or compliance with Corporate Practice of Medicine rules, it is very important to consult with an attorney licensed in your state. I am not an attorney, and nothing here should be taken as legal guidance.
A New Era for ABA Ownership
Illinois has joined New York in requiring that applied behavior analysis (ABA) practices be owned by licensed...
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In New York, similar rules are already in place. Professional service corporations (PCs) and professional service limited liability companies (PLLCs) that provide ABA services can only be owned by individuals licensed under Education Law Article 167. New York State Education Department’s ABA licensure page is at http://www.op.nysed.gov/prof/aba/. Together, these states now require clinician-only ownership for ABA service entities, which means traditional models involving non-clinical investors, public shareholders, or management-only partners cannot own the clinical practice entity.
Why This Matters
These changes bring ABA into alignment with the Corporate Practice of Medicine (CPOM) doctrine, a legal principle in some states that prohibits non-licensed individuals or corporations from owning entities that provide medical or health services. The aim is to ensure that licensed professionals control clinical decisions. Historically, CPOM rules centered on physicians, dentists, and psychologists; ABA generally sat outside those restrictions. With Illinois and New York moving ABA under clinician-ownership requirements, providers must reassess governance, ownership, and entity type to stay compliant.
Illinois: What the Law Says
The Illinois Behavior Analyst Licensing Act was enacted in 2022, and licensure began January 15, 2025 (IDFPR overview at https://idfpr.illinois.gov/profs/behavior-analysts.html). Section 150—titled Prohibition on Corporate Practice of Applied Behavior Analysis—states that no corporation, partnership, LLC, or other business entity may provide, attempt to provide, or offer to provide applied behavior analysis services unless every shareholder, partner, member, manager, director, officer, or agent of the entity is licensed under the Act. The statutory text is at https://www.ilga.gov/legislation/ilcs/documents/022500060K150.htm.
Key implications for Illinois providers include a hard compliance date of January 15, 2027; a requirement that ABA service entities be organized under the Professional Service Corporation Act or the Professional Limited Liability Company Act; and divestiture of any equity held by non-licensed owners by the deadline. Practices should evaluate board seats, officer roles, and any equity or profit interests to confirm that all owners and controlling persons meet the licensure requirement under 225 ILCS 6.
New York: Established Clinician-Only Ownership
New York has required clinician ownership for ABA since it began licensing behavior analysts in 2014. Education Law Article 167 (ABA) is administered by the New York State Education Department, with guidance at http://www.op.nysed.gov/prof/aba/. For business ownership, New York’s Business Corporation Law (Professional Corporations, Article 15) and Limited Liability Company Law (Professional Service Limited Liability Companies, Article 12) require that owners of professional entities be licensed in the profession practiced by the entity. In effect, that means ABA PLLCs and PCs must be fully owned by licensed behavior analysts or other licensed professionals permitted under New York law to co-own the professional entity.
What About Other States?
Illinois and New York are currently the two states with explicit ABA-specific ownership mandates. Several other states have general professional entity or CPOM-style rules that, when combined with ABA licensure, effectively limit ownership to licensed professionals in whole or in part. While these states may not mention “ABA” in their ownership statutes, the combination of professional entity laws and ABA licensure often results in a requirement that licensed clinicians hold all or a majority of the equity and retain control of clinical decision-making.
Washington: ABA is licensed under RCW 18.380 (https://app.leg.wa.gov/rcw/default.aspx?cite=18.380). Professional service corporations must have shareholders licensed in the same profession under RCW 18.100.050 (https://app.leg.wa.gov/rcw/default.aspx?cite=18.100.050), and similar constraints apply to professional limited liability companies. In practice, ABA entities organized as PSCs or PLLCs must have licensed owners.
Massachusetts: ABA is licensed under M.G.L. c.112 §§163–172 (https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXVI/Chapter112/Section163). Professional corporation rules (M.G.L. c.156A and related regulations) generally require ownership by licensed professionals, which yields a similar outcome for ABA practices formed as professional entities.
New Jersey: ABA licensure is overseen by the Division of Consumer Affairs (https://www.njconsumeraffairs.gov/ba). Under New Jersey’s Professional Corporation Act, N.J.S.A. 14A:17-5 (https://www.nj.gov/dobi/banklicensing/profcorp.html), shareholders of professional corporations must be licensed to render the professional service, which typically means clinician ownership for ABA PCs. PLLC rules enforce similar constraints through licensed service delivery.
Arizona: ABA is regulated through the Arizona Board of Psychologist Examiners (https://psychboard.az.gov/). Professional corporations are governed by A.R.S. §10-2213 (https://www.azleg.gov/ars/10/02213.htm), which restricts ownership and service delivery to licensed individuals, producing comparable clinician-ownership expectations for ABA professional entities.
Practical Questions Providers Are Asking
Does this mean only BCBAs can own an ABA practice? In Illinois, the statute ties ownership to those licensed “under this Act,” which points to licensed behavior analysts (LBAs). The statutory section is at https://www.ilga.gov/legislation/ilcs/documents/022500060K150.htm. In New York, ownership must be by licensees authorized under Education Law Article 167 (see http://www.op.nysed.gov/prof/aba/). Some states permit co-ownership with other licensed professionals (for example, psychologists) when scopes align and statutes allow it. The exact mix depends on each state’s professional-entity rules and board interpretation.
Can a publicly traded company own an ABA practice in Illinois or New York? No. Because shareholders would not all be licensed under the relevant professional acts, publicly traded ownership is not compatible with clinician-only ownership requirements. In CPOM states, the typical structure separates the clinical entity (owned by licensees) from management and administrative functions handled by a non-clinical company under contract.
What about management companies or investors? In CPOM frameworks, a common approach is the Management Services Organization (MSO) model. The licensed professionals own and control the clinical professional entity (PC/PLLC). A separate MSO—owned by non-clinicians or investors—provides non-clinical services (billing, HR, facilities, IT) via a management services agreement. This model is widely used in medicine, dentistry, and psychology and is likely to become more common in ABA as CPOM requirements expand.
Steps Providers Can Take Now
Providers in Illinois should begin a structured review ahead of the January 15, 2027 deadline. Confirm whether your current owners, officers, directors, and managers meet the licensure test in 225 ILCS 6/150 (https://www.ilga.gov/legislation/ilcs/documents/022500060K150.htm). Evaluate whether your entity is organized as a Professional Corporation or PLLC, and plan any required divestitures or conversions. Providers in New York should already be operating under clinician-only ownership; periodic compliance checks remain prudent. In other states, track legislative activity closely; even if there is no ABA-specific rule today, general professional-entity statutes paired with ABA licensure can require majority or full licensed ownership.
Across all jurisdictions, align governance documents (operating agreements, shareholder agreements, bylaws) with CPOM and professional-entity requirements, clarify clinical control and decision-making, and map out a transition path if you anticipate ownership changes. If you operate in multiple states, consider state-by-state charts that track licensure status, entity type, and ownership thresholds, with direct statute links for counsel to review.
Resources
- Illinois Behavior Analyst Licensing Act (index): https://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=4365&ChapterID=24
- Illinois Section 150 Prohibition on Corporate Practice: https://www.ilga.gov/legislation/ilcs/documents/022500060K150.htm
- IDFPR Behavior Analysts (licensure information): https://idfpr.illinois.gov/profs/behavior-analysts.html
- New York ABA Licensure (NYSED): http://www.op.nysed.gov/prof/aba/
- Washington ABA Licensure (RCW 18.380): https://app.leg.wa.gov/rcw/default.aspx?cite=18.380
- Washington Professional Service Corporations (RCW 18.100.050): https://app.leg.wa.gov/rcw/default.aspx?cite=18.100.050
- Massachusetts ABA Licensure (M.G.L. c.112 §§163–172): https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXVI/Chapter112/Section163
- New Jersey Professional Corporation Act (N.J.S.A. 14A:17-5): https://www.nj.gov/dobi/banklicensing/profcorp.html
- Arizona Professional Corporation Act (A.R.S. §10-2213): https://www.azleg.gov/ars/10/02213.htm
Conclusion
Illinois and New York now require clinician-only ownership for ABA practices. For Illinois providers, a firm deadline of January 15, 2027, sets the timeline for restructuring entities and divesting non-licensed owners. New York providers are already under similar requirements. In other states, professional-entity laws paired with ABA licensure can produce partial or majority licensed ownership requirements, with more CPOM-style restrictions likely to surface over time. The practical takeaway is straightforward: review ownership and entity structures early, document clinical control clearly, consider MSO models where appropriate, and work with healthcare counsel in your state to ensure compliance.
