Corporate Structure: Options and Considerations
I was recently asked to review the corporate structure options for a physician in New York, so I thought now would be a good time to send out a quick overview of same, along with a brief discussion on why choosing the right formation for your practice is important.
Physicians may operate as any of the following entities: a sole proprietorship, a professional corporation ("PC"), a professional limited liability company ("PLLC"), or a limited liability partnership ("LLP").
Keep in mind that in New York, the corporate practice of medicine prohibits any non-physician from owning or being even a part-owner of a medical practice.
Which entity you choose for your practice affects taxation, credentialing, general business liability (employment claims) and malpractice liability. While a physician is fully liable for any negligent or wrongful acts they commit, they are also accountable for the conduct of any person under their
direct supervision and control while providing professional service on behalf of the entity. Certain formation structures better protect against liability than others. Entities such as sole proprietorships and
partnerships carry extended personal liability exposure in most circumstance as they do not legally distinguish between the owners and the entity itself. While a physician owner is held accountable for the acts of their partners, physician employees and staff, choosing a PC or PLLC may offer additional
corporate layers of protection in certain circumstances.
Corporate structuring for your practice is oftentimes not a complicated, costly or time consuming process. If you have questions about structuring that you think may benefit the group, please do not hesitate to email them over and I will answer to the best of my ability and for the benefit of the
group.
