Legal & Entity Setup
The structure under everything you'll build.
- The question you're asking
- PC, LLC, S-corp, partnership — what's right and where?
- The decision in front of you
- Entity type, state of formation, tax election, founding agreements.
How to actually run form.
The order of operations for this phase. What comes first, what can run in parallel, what will cost you if you skip ahead.
Talk to a healthcare attorney in your state. Entity rules vary by state for physicians — wrong choice here is expensive to unwind.
- · EIN / state tax registration
- · Open business banking
- · Malpractice insurance quotes
- · Begin credentialing prep work (CAQH, NPI verification)
- ! DIY entity formation without state-specific physician practice rules
- ! Mismatched partnership terms between founders
- ! Forgetting to renew local business licenses annually
If you have a partner, multi-provider plan, or any state-specific question — schedule before you file.
Schedule a consultationPhase 03 is the legal and structural foundation under everything you'll build. Entity formation, tax election, partner agreements, contracts, licenses. Most physicians outsource this work — and they should. But you still have to make the decisions, because the wrong structure is expensive to unwind once you've started operating.
Entity types, briefly.
In most states, physician practices form as Professional Corporations (PC) or Professional Limited Liability Companies (PLLC). The choice depends on your state's rules, your tax election, and your partner structure.
PC: traditional choice. Strong liability protection. Default C-corp taxation unless you elect S-corp.
PLLC: newer option, available in most states. Same liability protection as PC, more flexible tax options, simpler ongoing compliance.
LLC (non-professional): not allowed for licensed professional services in most states. Verify your state's rules — forming the wrong entity type can invalidate your liability protection.
Tax elections matter more than the entity letter.
For most physician practices, S-corp election is the right tax move — it minimizes self-employment tax on reasonable owner compensation while still allowing pass-through taxation. The savings are substantial enough that the S-corp election is usually worth the additional compliance.
C-corp election is rarer but can work for practices planning to reinvest heavily, with multiple owner-employees, or pursuing specific benefit structures. Talk to a CPA who works with physician practices — generic small-business tax advice often misses healthcare-specific options.
Partnership terms before partnership.
If you're forming with one or more partners, the partnership agreement is the single most important legal document you'll sign. It defines ownership, decision-making, capital calls, profit distribution, what happens when a partner wants to leave, what happens when a partner dies or is disabled, and what happens when partners disagree.
Most partnership disputes that end practices could have been prevented by an honest conversation captured in writing before anyone needed it. Hire a healthcare attorney. Spend the money. Have the hard conversations now.
Licenses, registrations, and insurance.
State business license, federal EIN, state tax registrations, DEA registration update for the new entity, CLIA waiver if you're doing in-office labs, OSHA compliance program, HIPAA risk analysis, malpractice insurance, workers comp, general liability, cyber insurance — most of this is mechanical, none of it is optional.
Make the checklist with your attorney and your CPA, then work through it. Most of these items take days to weeks, not months. The mistake is treating them as urgent only when something goes wrong.
When you want help with this phase.
Each crew owns a specific piece of the build. You hire what you need, when you need it.
Talk to the team before you pour the foundation wrong.
One free consultation. Real answers. We'll tell you whether you need us — and if you don't, we'll tell you what to do anyway.
Schedule a Consultation