Minimizing liability for yourself and your veterinary practice is essential for practice owners. Forming a professional LLC (PLLC) allows veterinary owners to create a professional identity for their practices while limiting their personal liability. Understanding the unique requirements and benefits of a PLLC can help you make an informed decision about how to structure your veterinary practice.
What Is a Professional Limited Liability Corporation?
A professional limited liability company (PLLC) is a type of LLC for businesses offering professional services. PLLCs can be owned by one individual or several members. They provide the same kind of protection from legal liability as LLCs but are exclusively for professionals. Professional service businesses such as law firms, medical practices, accounting firms, dental practices, and veterinary practices can form PLLCs.
Steps to Apply for a PLLC for Your Veterinary Practice
While forming a PLLC requires more documents than a typical LLC, the process is straightforward. Every state has different business formation laws; not all states recognize PLLCs. Working with an attorney can help you identify and follow all of the required steps to form a PLLC. Generally, all members are required to hold professional licenses in their respective fields. For example, if you are forming a PLLC with one or more veterinarians, you all need to submit proof of your active veterinary licenses.
The first step involves working with an attorney to research state application requirements, ensuring a smooth application process. You’ll need to choose a business name that includes “PLLC” or “P.L.L.C.” at the end, draft an operating agreement, and file the formation documents. Depending on your location, you may need to include a premises license and proof of your veterinary practice license from your state’s veterinary medical board.
The Benefits of Forming a PLLC
Creating a PLLC can be beneficial for veterinary practices for several reasons. They protect members from personal liability for certain types of business debts. If you form a PLLC, you can protect your personal assets, including your home, vehicles, personal property, and more. PLLCS are considered separate business entities from the members.
For example, if a veterinary patient’s owner sues the veterinary practice and succeeds, the business owner’s personal assets cannot be used to satisfy the monetary judgment against the practice. Similarly, if the business defaults on a loan, the individual members won’t be held responsible for repaying the debt.
Additionally, PLLCs provide pass-through taxation. Profits from the veterinary practice will be considered income for the members and aren’t taxed at the corporate level. PLLCs offer owners flexibility in structuring the relationship between the members and those who manage the veterinary practice. Members can agree on a management structure that best meets their needs without having to comply with all of the formalities of a corporate structure. Members have the option to file taxes as an S Corp.
Contact a Veterinary Attorney Today
Forming a PLLC for your veterinary practice can provide a strong shield against liability, ensuring your personal assets are protected. At Mahan Veterinary Law, we provide skilled legal counsel for veterinary practices throughout the United States. With our extensive experience and knowledge, we can advise you on the best business structure for your practice and assist you in forming a PLLC. Don’t hesitate to contact Mahan Law – Veterinary Attorneys to schedule a complimentary, no-obligation case evaluation.