Question about business startup/structure
 

My wife is a psychologist. Her and some colleagues are looking to start up their own private practice for seeing clients, etc. They plan to meet with a CPA in the coming months but her and I have already started discussing the best way to structure things.

I don't think they want to form a partnership or anything that would make it messy if one of them wanted to leave.

They would prefer to credential with insurance companies under one entity to simplify billing, etc. Overhead would be shared but at the end of the month each member takes home what they collect minus expenses. They would probably have 1 or 2 front office/billing/scheduling type people working for them.

My question is what would be the most beneficial business structure for ease of use and also tax incentives?

Would it be possible for each one of them to have their own LLC but still have the "practice" that they all credential and bill under?

TIA

Look into a DBA. I think the LLC will have to cover all partners in your case.

Off the top of my head

CPA and lawyer talk IMO.

How does asking this question on CP make you feel as a person psychologically

Without a doubt, I would look up both starting with the CPA.

Individual llcs would have to work under a corp as contractors, with corp covering the shared overhead such as receptionist, building etc. A little complicated on startup, but may best for her needs.

Lawyer first.

Then CPA.

If it were me I'd set up an LLC taxes as an SCorp. That will shield retained earnings (which they'll need starting a business). They'll have to pay themselves a "reasonable wage" which I would anticipate would not be a problem. It should indemnify the owners if shit goes bad.

The operating agreement should set up buyout/buyin/dissolution/crap that happens. Be sure to include provisions for loans to/from companies. Nobody thinks about it, but most people end up doing it one way or the other. It should also set out who is responsible for various functions, bookkeeping practices, etc. It is also important to set out ahead of time what it will take to change anything, define strategy, mandatory meetings, and anything else specific to the practice.

I'd do employment contracts for each Dr. That will cover compensation and responsibilities. Mine is on a yearly basis in case I need to change anything.

Feel free to pm me if you have any specific stuff. I'm no lawyer or CPA but I work cheaper:).

My company is a subchapter S, which I think is best if you've got partners coming and going. It's got a few annoying tax implications. I think the other similar option is an LLC, which I suspect (not sure) is a little easier if you don't anticipate changes in ownership.

Not bad. :clap:

And I thought you were a farmer??

What annoying tax implications are you dealing with?

My company is a subchapter S because the SE tax was eating my soul.

I am.

Very informative. I may shoot you a PM down the road as this thing progresses. Thank you

There won't be any Tax issues after Trump becomes pres. Everybody will have to pay $200 and that's it.