Evelynn Bui

In October, California Governor Gavin Newsom signed into law two bills that create additional hurdles for investors in healthcare businesses. AB 1415 and SB 351 are both set to take effect on January 1, 2026, and transacting parties that do business in the Golden State should be sure to understand their impact.

Choosing the type of entity to form and where to form it are two of the most common early legal decisions that founders make when they start their own businesses. Founders typically register their companies in the state where they conduct business, which is often the most logical choice. Legal considerations are likely to be secondary when the company is still ramping up and building its business operations.

On June 30, 2022, California Governor Gavin Newsom signed SB-184 into law, which, among other things, created a new Office of Health Care Affordability (OHCA) within the CA Department of Health Care Access and Information.