What makes an entity “professional”
Four features, present in some combination in every state’s professional entity statute:- Licensee ownership. Owners must hold a license in the profession. Some states extend this to directors and officers.
- Purpose limitation. The entity may render only the specified professional service and activities ancillary to it.
- Name requirements. A designator (“P.C.”, “PLLC”, “P.A.”), and often constraints on the name itself or board approval of a trade name.
- Professional responsibility preserved. The entity form does not shield the individual from liability for their own professional negligence.
The three forms compared
PC, professional corporation
The most common form and the one this wiki uses as the default. Created by state professional corporation acts, governed like an ordinary corporation with the professional restrictions layered on. Key tax note: a PC taxed as a C-corporation that meets the definition of a personal service corporation is subject to a flat 21% federal rate on taxable income under IRC § 11(b), with no graduated bracket structure.1 This is why many PCs elect S-corporation status so income passes through to the owner. Whether that’s right depends on the clinician’s overall position, a question for a CPA, not a template.PLLC, professional limited liability company
An LLC with professional restrictions. Lighter governance and pass-through taxation by default, which suits many practices. The catch: availability varies. Several states do not permit PLLCs for the practice of medicine specifically. California is the significant example — medical practices there use professional corporations under the Moscone-Knox Professional Corporation Act. Some states permit PLLCs for some professions and not others.PA, professional association
A distinct statutory form used in a smaller number of states. Texas physicians commonly organize as PAs, and Florida uses the form as well. Mechanically it varies by state; in practice it functions similarly to a PC with state-specific differences in formation, governance, and naming. Do not assume a PA is available or appropriate outside the states that use it. See Form a professional association.What liability protection you actually get
This is the most misunderstood aspect of professional entities.
Malpractice insurance, not entity form, is your protection against clinical liability. Every professional entity statute preserves individual liability for the licensee’s own professional acts — that is a defining feature of the form, not a gap in it. The entity protects you from commercial liability and from other people’s malpractice.
The ordinary forms, for the MSO
The MSO is a normal business entity with no professional restrictions:
Most MSOs start as Delaware LLCs and convert. See Form the MSO.
Entity availability by profession, illustrative
This table shows the pattern, not a reliable lookup. Confirm against your state’s page and with counsel.
Full detail per state: CPOM by state.
The punchline
Your state and your profession dictate the choice far more than your preferences do. The realistic decision sequence:- What forms does my state permit for my profession? Often only one.
- If more than one, which has lighter governance? Usually the PLLC.
- What does the tax analysis say? Ask a CPA.
- Does my state require board pre-approval for any of them?
Sources
- IRC § 11(b) (flat 21% rate applicable to corporations, including personal service corporations, which have no graduated bracket benefit). Confirm current treatment with a CPA. 26 U.S.C. § 11.