In California, there is a general prohibition on the corporate practice of medicine, which includes a prohibition on operating a medical practice as a Limited Liability Partnership (“LLP”) as well. However, there is an exception for professional medical corporations. Professional medical corporations are growing increasingly popular as a business entity, and have become a go-to choice for both large and small practices. For those individual practitioners who want to start their own business for their practice, but do not want to expose themselves to the liability of operating their business as an unincorporated entity, professional corporations can offer a good source of liability protection. Professional corporations also work well for those who desire to operate their business through a more firmly structured and regulated entity as well.
Starting your San Diego business as a Sole Proprietor or General Partnership are some of the easiest business entities to form. However, both of these business entities come with a serious drawback – being that the business owner has no protection from liabilities that arise from the operations of the business. This means that if you are sued, or the business goes into debt, the business owner can be held personally liable for those debts. There are different types of partnerships however, including limited partnerships and limited liability partnerships that can offer variable levels of liability protection.
Corporations are probably the most well-known of the business entities, as they provide limited liability to shareholders, easy access to raising capital through investors, are the only business entity that can go public through an IPO, and have a rigid management structure allowing shareholders to delegate the management of the corporation to directors and officers.
A Limited liability company (“LLC”) is a business entity that allows for liability protection for the equity holders, without sacrificing each individuals ability to participate in the management of the company. Those that hold equity in the company are called “members” of the LLC, unlike corporations which have “shareholders.” The equity a member owns in the LLC is often defined as a “membership interest,” or sometimes a “membership unit.” This articles provides a brief overview of LLC’s and their structure.
Looking to start a new corporation and heard there are different types but are not sure what they are? This article summarily explains some key differences in structure, governance, and requirements of: (1) C-Corporations, (2) S-Corporations, (3) Statutory Close Corporations, and (4) Professional Corporations.
If you are looking to start a business, chances are that you have heard of one of the following business entities. This post will cover general details about sole proprietorships, partnerships, limited liability partnerships, limited liability companies, and corporations.