If you are planning to open a med spa in Colorado, or if you already operate one, the question of who can legally own a med spa in Colorado is not a technicality you can sort out later. It is the foundation of your entire business structure, your license compliance, and your personal liability exposure. Getting this wrong does not just create regulatory problems. It can result in DORA investigations, civil penalties, forced restructuring, and in some cases the loss of a professional license.
Colorado has specific laws that govern medical practice ownership, and those laws apply fully to med spas because the services they provide, including Botox injections, dermal fillers, laser treatments, IV therapy, and similar procedures, are classified as the practice of medicine under Colorado law. This article explains the key legal rules every med spa owner and prospective owner in Colorado needs to understand in 2026, including the Corporate Practice of Medicine doctrine, DORA compliance requirements, medical director obligations, and the new disclosure requirements introduced by Colorado House Bill 1024.
I am Maureen West, a Colorado healthcare attorney and registered dental hygienist. I have served as legal counsel to over a dozen DORA regulatory boards and I advise med spa owners and healthcare entrepreneurs throughout Colorado on exactly these questions. What follows reflects the current legal landscape as of 2026.
The Corporate Practice of Medicine Doctrine: Why It Governs Med Spa Ownership in Colorado
Colorado follows the Corporate Practice of Medicine doctrine, commonly referred to as CPOM. Under CPOM, the practice of medicine cannot be owned or controlled by a non-physician corporate entity or unlicensed individual. The doctrine exists to ensure that medical decisions are made by licensed professionals rather than by business owners motivated primarily by profit.
For med spas, CPOM means that any business providing services that constitute the practice of medicine must be owned, at least in its medical operations, by a licensed physician. A non-physician entrepreneur cannot simply form an LLC, hire a physician as an employee, and call that physician the medical director while retaining full ownership and control of the business. That structure violates CPOM in Colorado and exposes both the business owner and the physician to serious regulatory consequences.
The Colorado Department of Regulatory Agencies has increased its enforcement of CPOM violations in the med spa industry significantly since 2023, with targeted investigations now a routine part of how DORA monitors aesthetic medicine practices. If your med spa structure does not comply with CPOM, the consequences can include license suspension or revocation for the supervising physician, cease and desist orders for the business, and personal liability for the non-physician owner.
Who Can Legally Own a Med Spa in Colorado
A licensed physician can own a med spa in Colorado outright. A physician who owns the professional practice entity, provides or supervises all medical services, and maintains proper employment or contractor relationships with other clinical staff is operating within a compliant structure under Colorado law.
Other licensed healthcare providers may own a med spa depending on the scope of services offered. A nurse practitioner, for example, may own a practice in Colorado that provides services within their scope of practice, but that scope does not extend to all services commonly offered at med spas. Whether a given provider can own and operate a med spa without physician involvement depends on a careful analysis of the specific services being offered and the relevant Practice Acts governing that provider type.
A non-physician entrepreneur, including an esthetician, a business investor, or anyone without a healthcare license, cannot own the medical practice component of a med spa in Colorado. However, there is a legal business structure that allows non-physician investors and entrepreneurs to participate in med spa ownership through what is called a Management Services Organization, or MSO. Understanding this structure is essential for anyone who wants to own or invest in a Colorado med spa without a medical license.
The MSO Structure: How Non-Physician Entrepreneurs Participate in Colorado Med Spa Ownership
The Management Services Organization model is the most common legal structure used to allow non-physician investment in Colorado med spas while complying with CPOM. In a properly structured MSO arrangement, the business is divided into two distinct entities. The first is the physician-owned professional entity, which owns and controls all clinical operations, employs or contracts with clinical staff, and is responsible for all medical decisions and services. The second is the MSO, which is a separate company that provides management, marketing, real estate, equipment, billing, and other non-clinical services to the professional entity for a management fee.
A non-physician entrepreneur can own the MSO. They can receive compensation through the management fee structure. But the MSO cannot control clinical decisions, cannot direct medical personnel on clinical matters, and cannot operate in a way that makes the management fee a disguised profit-share from medical services. This is where many Colorado med spa structures fail regulatory scrutiny. If the MSO fee is set as a percentage of medical revenue rather than a fair market value fee for actual services rendered, DORA and the Colorado Medical Board may view it as an illegal fee-splitting arrangement.
A well-structured MSO agreement requires careful legal drafting. The agreement must clearly define the services the MSO provides, establish that management fees reflect fair market value, and draw a bright line between the business operations managed by the MSO and the medical operations retained exclusively by the physician-owned entity. I draft and review MSO agreements for Colorado med spas regularly, and the single most common problem I see is agreements that were either copied from a generic template or drafted without a healthcare law background. Generic business contracts do not address CPOM compliance and can expose both parties to significant liability.
The Medical Director Requirement for Colorado Med Spas
Every Colorado med spa must have a medical director who is an actively involved, Colorado-licensed physician. This is not a formality or a title given to a physician who signs paperwork once a month. Colorado law and DORA enforcement practice require that the medical director be genuinely engaged in clinical oversight of the services being provided at the practice. A physician who is simply lending their name and license to a med spa operation without meaningful involvement is placing their license at serious risk and potentially exposing the business to CPOM liability.
The medical director is responsible for establishing clinical protocols, supervising delegated procedures, ensuring that staff performing clinical services are properly licensed or operating within their scope under lawful delegation, and responding to adverse events. A physician serving as a medical director for a Colorado med spa should have a written agreement that clearly defines their responsibilities, their compensation, their authority over clinical decisions, and the scope of their oversight obligations.
One of the most common compliance failures I see in Colorado med spa operations is the medical director who has a weak or nonexistent written agreement with the practice and who does not have a clear understanding of what their obligations actually are. When a DORA complaint is filed against a med spa, the medical director’s conduct and the adequacy of their oversight are among the first things investigators examine.
Colorado House Bill 1024: New Disclosure Requirements Every Med Spa Owner Must Know
In 2025, Colorado enacted House Bill 1024, which introduced significant new transparency requirements for med spas that delegate medical aesthetic procedures to unlicensed individuals. If your med spa uses non-licensed staff to perform services under physician delegation, this law directly affects how you must communicate that fact to patients and the public.
Under HB 1024, Colorado med spas must post a physical disclosure sign in the facility that informs patients when delegated procedures are being performed by unlicensed professionals. The sign must include a link to the Colorado Medical Board’s website where patients can file complaints. Additionally, the disclosure must appear on the med spa’s website on all service pages associated with delegated treatments and on the bio pages of any unlicensed team members performing those services.
Before any delegated treatment is performed, the med spa must obtain a signed informed consent form from the patient that acknowledges they are receiving services performed by an unlicensed professional under licensed supervision, includes all of the information contained in the facility disclosure sign, and is retained by the practice for a minimum of seven years.
Many Colorado med spas have not yet updated their consent forms, website content, or in-office signage to comply with HB 1024. If your practice falls into this category, the time to address it is now. Non-compliance with HB 1024 creates regulatory exposure and can serve as a basis for a DORA complaint filed by a patient or competitor. I help med spa owners audit their existing forms and disclosures and bring them into compliance with the current requirements.
What Happens When DORA Investigates a Med Spa in Colorado
DORA has the authority to investigate med spas and the licensed professionals working within them in response to patient complaints, competitor reports, insurance irregularities, or as part of proactive enforcement sweeps in the aesthetics industry. When a DORA investigation begins, both the supervising physician and the business itself may be subject to scrutiny simultaneously.
The first document DORA typically requests in a med spa investigation is the ownership and corporate structure of the business. If the structure does not comply with CPOM, that finding alone can accelerate the investigation and expand its scope. DORA then examines the medical director agreement, the protocols governing delegated procedures, the credentials of staff performing clinical services, and the adequacy of patient consent documentation.
Healthcare professionals with legal representation in DORA proceedings are significantly more likely to achieve dismissal or non-disciplinary resolution than those who respond without counsel. My background representing DORA health boards as a former Colorado Assistant Attorney General gives me direct insight into how investigators and board members evaluate evidence and structure their cases. If you have received a DORA complaint related to your med spa, contact me immediately. The strength of your initial response has a direct impact on how the case proceeds.
Frequently Asked Questions About Med Spa Ownership in Colorado
Can a nurse practitioner own a med spa in Colorado?
A nurse practitioner may own a practice in Colorado that provides services within their licensed scope of practice. However, many services commonly offered at med spas, including certain injectables and laser procedures, may require physician involvement depending on the service and how it is classified under Colorado law. Whether a nurse practitioner can own a specific type of med spa without a physician owner depends on the exact services offered and requires a careful legal analysis.
Can a non-physician investor own a med spa in Colorado?
Not directly. A non-physician cannot own the medical practice entity that delivers clinical services. However, through a properly structured Management Services Organization arrangement, a non-physician investor can own the business management entity that supports the physician-owned practice. The MSO must be properly documented, the management fee must reflect fair market value, and the structure must maintain clear clinical independence for the physician owner.
Does my med spa need a medical director?
Yes. Every Colorado med spa that provides services constituting the practice of medicine must have an actively involved Colorado-licensed physician serving as medical director. This is a legal requirement, not a best practice recommendation. The medical director must have a written agreement with the practice and must be genuinely engaged in clinical oversight rather than simply lending their name to the operation.
What are the penalties for a CPOM violation in Colorado?
Penalties for Corporate Practice of Medicine violations in Colorado can include civil fines, business closure orders, and disciplinary action against the licenses of any physicians involved in the non-compliant structure. DORA investigations triggered by CPOM violations can also expose unlicensed owners to personal liability and can result in the forced dissolution or restructuring of the business.
How Maureen West and Associates Helps Colorado Med Spa Owners
At Maureen West and Associates, LLC, I work with med spa owners and entrepreneurs at every stage of the business lifecycle. For those just beginning, I help structure the ownership arrangement correctly from the start, draft compliant MSO agreements and medical director contracts, and build the compliance foundation that protects both the business and the supervising physician.
For established med spas, I conduct compliance audits that identify structural vulnerabilities before DORA does, review and update medical director agreements, and bring consent documentation and patient disclosures into compliance with current Colorado law including the requirements of HB 1024. For med spas already facing a DORA complaint or investigation, I provide experienced legal defense grounded in my background as former legal counsel to Colorado regulatory boards.
My unique position as both a healthcare attorney and a licensed clinician means I understand the practical realities of running a Colorado healthcare practice, not just the legal framework surrounding it. That combination makes a real difference when it comes to building structures that work in the real world, not just on paper.
The Bottom Line on Med Spa Ownership in Colorado
Med spa ownership in Colorado is not something you can structure based on a general business attorney’s advice or a template agreement found online. The Corporate Practice of Medicine doctrine, DORA enforcement, HB 1024 disclosure requirements, medical director obligations, and proper MSO structuring all intersect in ways that require specialized healthcare law knowledge.
The cost of getting this wrong, whether through a DORA investigation, a license discipline proceeding, or a forced business restructuring, is significantly higher than the cost of establishing a compliant structure from the beginning. If you are planning to open a med spa in Colorado, or if you are concerned about whether your existing practice structure meets current legal requirements, I offer a free 20-minute consultation to discuss your specific situation. Contact Maureen West and Associates, LLC at 720.270.0488 or at maureen@maureenwestlaw.com.
