Entity Questions

[lakelife]

I have 2 questions that I am hung up on.

1. I just bought into a dental practice where we have a parent PLLC. The retirement plan company and the other partners advisors are recommending we both set up our own PLLCs underneath the parent one. Is this necessary? A good idea? That sort of thing.

 

2. I am also starting a podcast with 1 or two other dentists. If it was just me I wouldn't worry about having an entity or an operating agreement and what not. But in case this does start to take off would it be beneficial to set up some sort of entity or operating agreement or both for the podcast with the other people involved. Currently its all my capitol and all my ideas but I have brought 2 others on to help with it and be apart of the podcast.

 

Would love to hear some thoughts on these two scenarios! Thanks

[jfoxcpacfp]

lakelife wrote:

I just bought into a dental practice where we have a parent PLLC. The retirement plan company and the other partners advisors are recommending we both set up our own PLLCs underneath the parent one. Is this necessary? A good idea? That sort of thing.

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What is the basis for their recommendation? For liability purposes? Are you planning on a sole proprietorship otherwise? PLLC's are easy to set up and manage. You'll have to pay fees to your Secretary of State to organize along with an annual fee, amounts vary by state. You'll report results of operations on a schedule C with your 1040. Of course, you realize this is not possible if you are located in CA.

lakelife wrote:

I am also starting a podcast with 1 or two other dentists. If it was just me I wouldn’t worry about having an entity or an operating agreement and what not. But in case this does start to take off would it be beneficial to set up some sort of entity or operating agreement or both for the podcast with the other people involved. Currently its all my capitol and all my ideas but I have brought 2 others on to help with it and be apart of the podcast.

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Yes, what if this does take off? Or what if one of the other dentists steals all the ideas and goes rogue? You need a written agreement. You are almost certainly a partnership by default, which will require the filing of a separate income tax return if you are serious about the endeavor. This should be handled by a corporate attorney. Be sure to ask your CPA for input regarding income, expense, and tax aspects of the agreement.

[Zaphod]

Agree with Johanna, if it becomes successful these questions will come up and be expensive and or relationship damaging. Much easier to get everyone on the same page up front so there are no questions. Think of it as insurance. If its all your capital, ideas, etc...I would structure it that way with some sort of IC like agreement with the other guys unless they are going to be more involved than just someone to bounce off of and speak occasionally.

[lakelife]

Thank yall for the feedback on that. As far as the 1st part I guess its just for liabillity, the other option would be SP in my name I guess. Doesnt seem like a ton of work.

As far as the podcast goes thats what I was thinking...I just didnt know how involved it needed to be. Do you think just a contract type operating agreement would work or do I need to go so far as to create a partnership or llc for it?

[jfoxcpacfp]

lakelife wrote:

As far as the podcast goes thats what I was thinking…I just didnt know how involved it needed to be. Do you think just a contract type operating agreement would work or do I need to go so far as to create a partnership or llc for it?

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I'm guessing you stand to lose a lot if your podcast give erroneous information and you are sued for someone's loss, mental anguish, etc. Form an LLC taxed as a partnership. You will need an operating agreement that all partners sign but that may be separate from the partners' agreement. This is a topic to discuss with your attorney.