The choice of corporate entity is one of the most crucial ones to choose when starting a medical practice in Virginia. Creating a limited liability company (LLC) is a choice that medical professionals frequently think about. The good news is that, assuming certain conditions are satisfied, Virginia law permits medical practices to be set up as LLCs.
Medical professionals must first make sure they have their licenses and are in good standing with the appropriate boards before they may establish a professional limited liability corporation (PLLC) in Virginia. The Virginia State Corporation Commission (SCC) must receive the Articles of Organization that they have submitted. The term “professional” or “PLLC” in the name of the entity must appear in the Articles of Organization to signify that it is a professional entity.
Having a PLLC in place offers members personal liability protection, which is one of its advantages. In other words, members are not held personally liable for the PLLC’s debts and responsibilities. Members may still be held accountable for their own mistakes or negligence, though. To protect themselves and their PLLC, medical professionals should get sufficient malpractice insurance.
When organizing a PLLC, medical professionals should collaborate with a PLC lawyer. The PLLC’s structure and compliance with all legal criteria can be helped by a PLC attorney. Additionally, they can offer advice on matters like liability defense, taxation, and ownership structure.
Members of a medical practice may ask how they will be paid once it has been incorporated as an LLC or PLLC. Depending on how the LLC is taxed, the answer to this question will vary. Members may receive distributions of profits depending on their ownership stake if the LLC is taxed as a partnership. Members must pay themselves a fair remuneration and may distribute earnings if the LLC is taxed as a S company.
Finally, some medical professionals might ponder whether a single person can own an LLC. Yes, it is the answer. Single-member LLCs, which can be owned by a single person or business, are permitted under Virginia law. For medical professionals who are just starting out, single-member LLCs can be a viable alternative because they still offer personal liability protection.
In conclusion, Virginia medical professionals may find it beneficial to establish an LLC or PLLC. It offers protection from personal liability and permits a flexible ownership structure. To make sure the PLLC is properly constructed and that all legal criteria are completed, it is crucial to work with a PLC attorney. Additionally, medical professionals should think about how they will pay themselves based on the tax status of the LLC and have sufficient malpractice insurance.
No, a single-member LLC and a sole proprietorship are not the same thing. Despite the fact that a single person owns and runs both types of businesses, an LLC provides limited liability protection whereas a sole proprietorship does not. A sole proprietorship is not a separate legal entity from its owner, although a single-member LLC is.