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A Hybrid Business Entity
By Staff Reporters
A limited liability company (LLC) is a form of business entity some physician use that can provide many advantages to a physician medical practice owner.
Definition
As the name indicates, there is limited liability to the physician. Therefore, the practice owner’s personal assets are protected from claims against the practice and also from practice business debts, unless of course, the owner personally guaranteed any business debts.
No Absolute Immunity
But, limited liability protection is not absolute. There are instances where a doctor owner’s personal assets can be reached.
Assessment
Limited liability protection is similar to that of a corporation. However, unlike a C corporations, an LLC is a “pass-though” entity for taxation purposes. The benefit of being a pass through entity is that there is only one level of tax imposed on the LLC’s earnings. With a C corporation, the earnings are taxed at the corporate level and taxed again at the shareholder level when the earnings are distributed to shareholder.
Thus, the LLC can be considered a hybrid between a corporation and a partnership.
Charitable Business Planning and the LLC
http://www.chslegacy.org/giftlaw/article.jsp?WebID=GL2007-1230&D=201010
Conclusion
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Filed under: Glossary Terms, Practice Management, Risk Management | Tagged: limited liability company, limited liability corporation, LLC | Leave a comment »
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