| Doctors who are interested in learning how niche | | | | on taxes. Tax liability is assessed at the member level, |
| medical practices can help them make their business | | | | rather than at the overall LLC level. Some states, |
| operations more efficient will be interested in | | | | however, will levy a "franchise tax" from limited liability |
| discovering the sensibility of a limited liability corporation | | | | corporations as compensation for the privilege of |
| (LLC). Even physicians who are much better versed in | | | | limited liability. Having an LLC also means that it |
| healthcare than they are in the legal aspects of running | | | | combines the limited liability features of a corporation |
| a business often appreciate the value of operating an | | | | and the flow-through tax treatment of income and |
| LLC, particularly when they have chosen to run a cash | | | | losses of a partnership. |
| pay medical practice. | | | | * Limited liability. Medical marketing firms will often tout |
| Once you have successfully built your cash pay | | | | the benefits of limited legal and fiscal liability that comes |
| medical practice, your attention will undoubtedly turn to | | | | with a limited liability corporation. Members-in this case |
| how to effectively protect your business. Among the | | | | the physician/owner-are protected from some of the |
| many benefits of filing your cash pay medical practice | | | | acts and debts of the corporation. Firms that provide |
| as a limited liability corporation are: | | | | healthcare marketing resources can give interested |
| * Less paperwork than a traditional corporation. In the | | | | physicians the particulars about legal liability. Unlike a |
| spirit of reducing overall paperwork, many firms that | | | | general partnership, owners of an LLC have limited |
| specialize in marketing for physicians will suggest | | | | liability and, unlike limited partners in a limited partnership, |
| forming a limited liability corporation. Forming a | | | | they do not lose theirlimited liability if they actively |
| corporation usually means that physicians will need to | | | | participate in management. |
| keep substantial records and maintain meticulous paper | | | | * Free from the rules of an S corporation. While its |
| records; this administrative headache is largely avoided | | | | flow-through tax advantages are generally slightly |
| by filing to have your cash pay medical practice | | | | superior to those of an S corporation, an LLC is not |
| designated as a limited liability corporation. | | | | subject to the numerous technical rules that apply to S |
| * Ability to form an LLC with a single owner. Physicians | | | | corporations. Thus, for example, an LLC can have |
| who have chosen to use healthcare marketing tools to | | | | more than 35 shareholders; have foreign owners |
| establish a cash only practice often run a | | | | ("members"); have owners that are corporations, |
| single-physician office. Many states allow the formation | | | | partnerships, trusts, or other LLCs; own 80% or more |
| of LLC's with a single owner, which means that the | | | | of the stock of an affiliated corporation; derive a large |
| process is streamlined even further. No hassles with | | | | portion of its revenue from certain net passive income |
| Boards of Directors; and the ability to makedecisions | | | | sources; and issue more than one class of stock. |
| yourself-this is an important benefit of forming an LLC. | | | | Violation of any one of these technical restrictions |
| * Default tax classification. Utilizing default tax | | | | would disqualify an S corporation. |
| classification, physicians are often able to save money | | | | |