The LLC Defined for Physicians

A Hybrid Business Entity

By Staff Reporters

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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.


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.


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


And so, your thoughts and comments on this ME-P are appreciated. What type of business entity is your medical practice, and why? Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

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