So, you’ve decided to purchase or restructure a dental or medical practice. Congratulations! One of the very first steps that you will have to take as you start down this new path is to decide upon a legal entity for your business. If you will be working alone or in a small office with one or two other practitioners, then you may be inclined to choose a sole proprietorship or a partnership when structuring your business. These options, however, place you at risk of having your personal assets used for business debts. Therefore, to protect yourself, you should create a business entity for legal purposes.
Most businesses are able to function as a regular corporation or an LLC (limited liability company); however, some professional businesses are different. While some states allow dentists to function under these entities, all states allow dentists to form either a professional corporation or a professional limited liability company. California, for example expressly prohibits licensed professionals from operating as an LLC, leaving professionals such as doctors and dentists to choose from professional corporations or professional limited liability companies.
Forming a separate legal entity such as a professional corporation, “PC,” professional services corporation, “PSC,” or professional limited liability company, “PLLC” can your assets by establishing an entity which is separate from yours as an individual. The amount and type of paperwork required in order to create these entities varies from state to state, but the peace of mind is well worth the time and expense. A healthcare transition attorney can assist you with questions as to which legal entity may be best for your needs.