As a healthcare and business law firm, we have many clients who wish to not only practice medicine but own their own businesses. After developing a name for their business and generally outlining the mission and purpose of the business, the next step for our healthcare business clients is to determine what kind of entity they want to create. This post intends to generally outline three options in Georgia for healthcare professionals wishing to create an entity for the purpose of providing professional services.
Limited Liability Company
Although some states offer a Professional Limited Liability Company (“PLLC”) option, Georgia does not. Instead, the Georgia Code includes a caveat expressly allowing professionals to create Limited Liability Companies (“LLCs”) for the provision of professional services. Specifically, O.C.G.A. § 14-11-1107(f) states:
“The laws of this state relating to establishment and regulation of professional services are amended and superseded to the extent such laws are inconsistent as to form of organization with the provisions of this chapter and are deemed amended to permit the provision of professional services within this state by limited liability companies.”
In addition to allowing professionals to create a typical LLC, the Georgia Code allows professionals to create Professional Corporations (“P.C.s”). Georgia Code Title 14, Chapter 7 contains the rules governing P.C.’s. In general, “a person or a group of persons licensed to practice a profession in this state may elect to practice as a professional corporation by complying with this chapter, irrespective of any law which, on March 11, 1970, prohibited the practice of the profession by a corporation.” O.C.G.A. § 14-7-3.
Lastly, the Georgia Code allows professionals to create Professional Associations. Georgia Code Title 14, Chapter 10 contains the rules governing Professional Associations. A Professional Association is formed when “[a]ny two or more persons duly licensed to practice a profession under the laws of this state” wish to “form a professional association, as distinguished from a partnership and a corporation, by associating themselves for the purpose of carrying on a profession and dividing the gains therefrom upon compliance with the terms of this chapter.” O.C.G.A. § 14-10-3.
Knowing three of the options available to professionals wishing to open a business is just the start of the analysis. There are pros and cons for each type of business entity. For instance, LLCs are generally considered more flexible than other entity structures while still affording protections to owners and tax benefits. On the other hand, entities governed by corporation rules are less flexible than LLCs. Of course, the above three options are not an exhaustive list of the structure of professional businesses allowed under Georgia law.
Our attorneys are experienced in advising healthcare business clients on all matters relating to owning a business, including business formation. If you have questions about which entity type is right for your business or would like to discuss this blog post, you may contact our healthcare and business law firm at (404) 685-1662 (Atlanta) or (706) 722-7886 (Augusta), or by email, firstname.lastname@example.org. You may also learn more about our law firm by visiting www.hamillittle.com.
*Disclaimer: Thoughts shared here do not constitute legal advice.