What are the Advantages/Disadvantages of Organizing a Medical Practice as a GP, LLP, PC or PLLC?
Physicians are limited in the number of business forms that they can utilize when organizing their medical practices. The decision concerning "business form" is largely dependent upon the state within which the medical practice is situated, the number and specialty of the physicians involved with the medical practices and the services offered by the medical practice. Most states prohibit the corporate practice of medicine and therefore limit non-physician participation in a number of business forms.
When evaluating and establishing the business form most suitable for your health care practice the following factors must be considered:
(a) The number and specialty of physicians/practitioners involved with the medical practice;
(b) The scope of services to be provided by the medical practice;
(c) The amount of control and/or managerial responsibility to be allocated among the physicians involved with the medical practice; and
(d) The proposed distribution scheme.
In addition to evaluating the legal considerations concerning the proposed business form, you must also consult with an accountant to consider the tax advantages/disadvantages accompanying the proposed business form. Your decision concerning business form will control your "status" with the medical practice as well as the legal and tax implications to your medical practice during the organization, existence and dissolution of your medical practice.
For more information about the advantages and disadvantages of organizing a medical practice as a General Partnership, Registered Limited Liability Partnership, Professional Corporation, or Professional Limited Liability Company, please contact Ms. Ilana Sable, Esq.
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