Why The “PA” Is The Worst Legal Entity To House Your Medical Practice
PAs (professional associations) and PLs (professional limited liability companies) are the single worst form of legal entity to house your medical practice; and perversely, this is business entity that most physicians have been told to use by their advisers. They provide little to no asset protection, make protecting corporate distributions impossible, and can even prevent a sole practitioner from being able to protect their future wages. With the crash of the Florida real estate market, our depressed economy, and the seemingly never ending cuts of physician reimbursements, protecting the source of your income is more important than ever. Unfortunately, huge numbers of physicians have had PAs formed for them by their attorneys and accountants simply out of habit, and not because it best meets their needs. Fortunately, recent laws now make it possible for a physician to convert their PA to an entity that provides significant advantages without (i) requiring them to get a new tax ID, or (ii) suffering a break in their cash flow from medicare or insurance companies. This article discusses the problems posed by PAs, why so many physicians have them, and what Florida physicians can do to protect the source of your livelihood in these uncertain economic times.
Ian Dildine
