About to finish fellowship, how to set up private practice corporation?

[Good Life]

I'm just finishing my fellowship and will soon be joining an immediate family member in private practice. He has his practice setup as a PC, and has seven employees. I'll be joining him, and am trying to get a handle on how to structure the practice now.  He will be retiring in about one year, and then it will be just me. My plan was to be his employee for a year, and when he retires set up the practice as a PC in my name. Does this sound reasonable? Or should I set myself up as a separate entity from the get go? 

Thanks for the help. I'm new to all this financial stuff. I have read articles on PC, S corp, LLC and don't know yet the ideal one for my setup. I'll obviously need a good accountant/advisor. My future partner has an accountant/advisor that is very experienced but "expensive", and he has recommended that I use one of his younger partners that I can be with long term, and doesn't charge so much now.   I'd love some input on that as well! 

[jfoxcpacfp]

How you set yourself up depends significantly on the terms of your contract. At least, that is the first priority and then choosing the right entity, rather than the other way around.

I would be particularly cautious about the contract and not bypass any formalities simply because you're related. In fact, you should treat this as an arm's-length transaction and have a separate CPA and attorney who will be your advocate and will not be susceptible to divided loyalties. While I've blogged about the types of entities recently, I don't know that you are ready to make that choice until you have hammered out the details with your relative.

As to cost, that is definitely a factor, but you shouldn't let it be the primary factor. Experience with your profession, proactivity, and a creative mind are very important and will probably come at a price. The right CPA can make a tremendous difference and easily pay for him/herself with good advice.

Also, by "PC", you presumably mean "PSC", correct? That would not be my first choice unless you elect S-corp status. Otoh, the new tax bill (if and when it comes about) could change that recommendation.