Business structure for new practice
I am starting a new ob/gyn practice in a southern small town. I plan on a budget of $750,000 per year with one RN, LPN, NP, an office manager, and two receptionists. I don't plan on adding another physician for about three years. What business structure would you recommend for this effort?
Q. I am starting a new ob/gyn practice in a southern small town. I plan on a budget of $750,000 per year with one RN, LPN, NP, an office manager, and two receptionists. I don't plan on adding another physician for about three years. What business structure would you recommend for this effort?
A. Under the described circumstances, forming an S-Corporation is advisable. Benefits include having limited liability for the actions of other staff members, including future physicians, and providing a superior asset protection strategy. Although incorporating will not protect you from your own negligence, it insulates you from the actions of others. An S-Corporation is a pass-through entity, which means that there is generally no corporate level of tax and any tax obligation passes on to your individual tax return. An S-Corporation makes year-end tax planning much easier. Also, certain fringe benefits can be deducted through the corporation. Maintaining an S-Corporation is neither difficult nor expensive.
David J. Schiller, JD, LLM
Schiller Law Associates
Norristown, PA
Phone: 610-277-5900
djsTaxMan@comcast.net
