Hello everyone
This is my first thread and I'm hoping this great community can provide some help. Here's the quick story on me:
I'm a board-certified medical doctor working as an independent contractor in a sole-proprietor capacity for the past 10 months and just got a new independent contract assignment in Pennsylvania (PA). A recent conversation with a fellow physician opened my mind to the idea of creating a single-member LCC (or, equivalently, a solo-PLLC) for tax purposes by choosing the S-corp tax option and I'm considering doing this before I start my new job in PA. I realize the tax savings are nominal relative to a sole-proprietorship if my income is not greater than a certain amount. However, with regard to liability exposure I've done quite a bit of reading on the LLC/PLLC topic online (including a For Dummies book on LLCs) and it seems there is alot of confusion about what these entities can (and cannot) do for a doctor. As far as I can tell, an LCC/PLLC does NOT reduce (nor offer any extra protection against) professional liability exposure for physicians, which is why we must obtain malpractice insurance to cover this risk. (1.) Am I correct on this conclusion? Secondly, (2.) I'm unsure whether an LLC/PLLC nonetheless helps to protect my personal assets (e.g. my home, car, savings, retirement, and investing accounts) from a lawsuit related to my professional services as a physician. Thirdly, (3.) suppose I get sued for something unrelated to my role as a physician; would an LLC/PLLC offer protection to my personal assets in this case? In other words, is an LLC/PLLC a smart thing to create regardless of its lack of malpractice protection because it maximizes personal asset protection against non-job related liability? Lastly, (4.) am I mistakenly lumping LLC and PLLC with regard to these issues? Are there different answers to questions (1), (2), and (3) for an LLC versus a PLLC (in PA in particular)?
Thank you!
drj
This is my first thread and I'm hoping this great community can provide some help. Here's the quick story on me:
I'm a board-certified medical doctor working as an independent contractor in a sole-proprietor capacity for the past 10 months and just got a new independent contract assignment in Pennsylvania (PA). A recent conversation with a fellow physician opened my mind to the idea of creating a single-member LCC (or, equivalently, a solo-PLLC) for tax purposes by choosing the S-corp tax option and I'm considering doing this before I start my new job in PA. I realize the tax savings are nominal relative to a sole-proprietorship if my income is not greater than a certain amount. However, with regard to liability exposure I've done quite a bit of reading on the LLC/PLLC topic online (including a For Dummies book on LLCs) and it seems there is alot of confusion about what these entities can (and cannot) do for a doctor. As far as I can tell, an LCC/PLLC does NOT reduce (nor offer any extra protection against) professional liability exposure for physicians, which is why we must obtain malpractice insurance to cover this risk. (1.) Am I correct on this conclusion? Secondly, (2.) I'm unsure whether an LLC/PLLC nonetheless helps to protect my personal assets (e.g. my home, car, savings, retirement, and investing accounts) from a lawsuit related to my professional services as a physician. Thirdly, (3.) suppose I get sued for something unrelated to my role as a physician; would an LLC/PLLC offer protection to my personal assets in this case? In other words, is an LLC/PLLC a smart thing to create regardless of its lack of malpractice protection because it maximizes personal asset protection against non-job related liability? Lastly, (4.) am I mistakenly lumping LLC and PLLC with regard to these issues? Are there different answers to questions (1), (2), and (3) for an LLC versus a PLLC (in PA in particular)?
Thank you!
drj
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