Practicing physicians who start their own medical practices have the choice to incorporate or stay unincorporated - and you would be surprised by how many choose not to incorporate their services! While skipping incorporating your business means you get to save money, ultimately incorporating lays a foundation that aids to and protects your practice. If you're not sure which legal structure to correctly legitimize your practice as, we've included some entity recommendations below.
What's the Best Entity to Form?
If you want to protect your personal assets and plan on growing your practice... Start an LLC. While you'll be doing more paperwork with an LLC than you would if your practice wasn't incorporated, you'll also rest easy knowing that you now have extra liability protection. Your personal and professional assets are kept separate in an LLC and there are plenty of tax benefits available too. For growing practices, LLCs can have an unlimited number of owners while not being required to diligently take down meetings or minutes like a Corporation.
If you want profits to flow directly to your personal tax returns... File an S-Corporation. S-Corporations have a pass-through structure that passes net profits and losses along to shareholders and it's because of that structure that they are only taxed once at the shareholder level. And remember that aside from health insurance premiums, you won't be able to write off the entire cost of benefits.
Why Your Medical Practice Needs This Legal Protection
While setting up the correct foundation for your practice won't protect you 100% from liability, it does offer a medical practice a lot of benefits. You'll be better protected from lawsuits, pay less on taxes, and establishes credibility with your patients. Get the groundwork for your practice established now! Form an LLC with the help of our experts who make it easy to file your documents so you can return to perfecting your recipes to share with the world.