Provided by:  Jennifer Kirschenbaum, Esq.

May 9, 2019

 

Question

Hi Jennifer,

I am interested in forming a new medical practice. I am hearing differing opinions on whether I should form a PC or a PLLC.  Do you have an opinion? 

Thanks, 
Dr. L

Answer

I have an opinion, but not a definitive answer.   The non committal considerations I believe worth mentioning as you make a decision are (not an exhaustive list), as follows:
  • PC structure requires distributions be paid PRO RATA - in accordance with Ownership - PLLC is less rigid and you have more flexibility on how you pay profits out
  • Both Constructs will offer an extra corporate layer of protection
  • Neither construct can shield you from your personal malpractice
  • Your Accountant CARES - -your accountant prefers to file taxes for one of these constructs more than the other - and that matters because you want to avail yourself of all accounting benefits - so you MUST (in my opinion) get your accountant's opinion   
  • The PC is a bit cheaper to form because you do not have to "Publish' - pay to tell the world in publications that you formed your entity. 
  • Both constructs require doctors have the name approved by the Department of Education in NY State.  
 Again, the above is not an exhaustive list. My experience, under the LLC law, the PLLC is a bit more flexible, but slightly more expensive to form, and your accountant may have legitimate reasons he/she prefers the PC - so keep digging and good luck!  Please be advised NY is currently taking 5-6 months to process new medical practice applications - so plan in advance! NJ and CT are instantaneous. I do not have any idea when NY will get its act together....