Mahan Law advises veterinarians around the country on all aspects of practice ownership, including entity formation. Let an experienced veterinary attorney walk you through the process:
From selecting the appropriate business entity to preparing foundational documents and legal agreements to protecting your practice from liability.
When you work with us, you will be confident that your veterinary practice has a strong foundation from which you can grow your business and achieve your objectives. Contact our office today to schedule your initial consultation.
What Veterinarians Need to Know About Entity Formation
Whether your veterinary practice is a startup, expanding into a new market, or transitioning to a different business structure, our firm will help you create a well-conceived formation strategy.
Selecting the appropriate business entity for your veterinary practice involves several considerations, such as:
- Your business objectives
- The parties involved in the practice (e.g. partners, associates, investors)
- Capital investment and other financial considerations
- Management and employee issues
- Compliance and regulatory requirements
Our seasoned veterinary attorneys will help you make informed decisions about the type of entity that best suits your needs and objectives.
There are two levels of corporate tax treatment under the Internal Revenue Code: subchapters C and S. Subchapter C corporations are usually large and publicly held. This structure is better suited for a veterinary hospital or clinic rather than a sole practitioner.
Notably, C-corps pay taxes on profits, and shareholders who receive dividends are taxed based on their individual returns. By contrast, Subchapter S corporations avoid "double taxation" but must meet the following conditions:
- Be domestic and not affiliated with a larger corporate entity
- Not have more than 100 shareholders
- Have one class of stock
S- and C-corps protect the owners of a veterinary practice from tax and legal liabilities. You must also create foundational documents if you are forming a corporate entity, including Articles of Incorporation and Bylaws:
- Articles of Incorporation (also known as Certificate of Incorporation in some states) include information such as the corporate name, the purpose of the business, the type of stock (e.g. common or preferred), the amount of stock that will be issued, and the name and address of a registered agent.
- By-laws are formal rules governing the day-to-day operations of the veterinary practice, including the rights and powers of the shareholders, officers, and directors, and voting and proxy rules.
If you are forming a corporate entity for your veterinary practice, turn to Mahan Law. We know the ins and outs of entity formation and can also advise you on other options, such as:
Professional Limited Liability Companies (PLLC)
This business structure combines the features of a sole proprietorship or partnership with corporate protection. A PLLC protects the owners of a veterinary practice from personal liability for the practice's taxes and debts but does not have the restrictions of an S-corp. Our attorneys can assist with setting up your veterinary practice as a PLLC and help prepare the underlying operating agreement.
Many veterinary practices initially form as a general or limited partnership. In a general partnership, each partner has equal power to make business decisions for the practice, but all partners share legal and tax liabilities. In a limited partnership, each member has limited exposure to the other partner's liabilities. Our legal team will work closely with you to prepare a partnership agreement that protects the interests of each partner.
Comprehensive Entity Formation Services for Veterinary Professionals
At Mahan Law, we not only prepare and file legal documents but also provide advice and counsel on a wide range of issues related to entity formation.
Depending on the structure of your veterinary practice, we can help protect your interests through well-conceived business agreements, including:
- Shareholder agreements
- Buy-sell agreements
- Service agreements
- Employment agreements
- Non-disclosure/non-compete agreements
By working with our veterinary attorneys, you can put agreements in place that clarify the rights and responsibilities of owners, employees, and third parties.
Employment Law Issues
Veterinary practices must follow applicable federal, state, and local employment laws regarding discrimination and workplace harassment. In short, making employment decisions (e.g. hiring, firing, compensating) based on protected characteristics such as age, race, sex, color, national origin, religion, disability, and sexual orientation is illegal.
Moreover, sexual harassment is considered unlawful discrimination. Veterinary practices must also comply with wage and hour laws. At a minimum, all employees must earn at least the minimum wage, and eligible employees must receive overtime pay.
Our attorneys assist veterinary professionals with preparing employment agreements and employee handbooks that spell out the practice's policies on compensation, employment benefits, duties, employee conduct, disciplinary matters, and other terms of conditions of employment.
While disputes involving owners, partners, shareholders, and clients are not uncommon, protracted litigation could interfere with the operations of your new veterinary practice. Our attorneys ensure that agreements include provisions for resolving disputes through mediation or arbitration.
Contact Our Experienced Veterinary Attorney
Launching a veterinary practice starts with having a comprehensive entity formation strategy. That's where Mahan Law comes in. We understand the unique needs of veterinary professionals and will help you select a business entity that best suits your objectives. Contact our office today to get started.
Mahan Law assists veterinarians with entity formation throughout the United States including the states of Florida, Ohio, Kentucky, and Indiana.