Professional Practice Planning
As a professional, you know that running a professional practice has unique challenges that most businesses don’t have to worry about. Your license is on the line every time you agree to meet with a potential client. You also have ethical rules that restrict who you can share your business with.
Forming a professional corporation or professional association is a common way for professionals to do business because of the liability protections and flexible tax rules granted to professionals.
Professionals must consider many factors when planning their professional practice, such as:
- Type of professional entity.
- Ownership and management structure.
- Buyout and retirement terms.
- Dissolution terms.
What Type of Professional Entity Do I Need?
Nearly all types of business entities also have a “professional” variant such as the Professional Limited Liability Company (as in Hunter Sargent, PLLC) and the Professional Limited Liability Partnership (PLLP).
The right structure for your professional entity will depend on far too many factors to list here, as is the case with regular businesses. Factors such as litigation risk, estate planning, federal jurisdiction, taxation, and retirement goals will all affect which entity is right for your professional practice.
Hunter Sargent, PLLC can help you understand these business concerns in-depth and make sure you have all the information you need to form a professional entity that’s right for your professional needs and goals.
Professional Corporation or Professional Association?
The main difference between a professional corporation and a professional association is the type of service offered by the professional.
Doctors, podiatrists, dentists, chiropractors, optometrists, optometrists, veterinarians, and licensed mental health professionals must incorporate as a professional association. All other professionals may choose to create a professional corporation.
Filing the incorrect formation document with the Texas Secretary of State can be an embarrassing public mark for a professional. Your reputation is your business.
