If you’re a licensed professional in Missouri, you won’t set up a professional limited liability company (PLLC) as you might in another state. There are no professional LLC in Missouri. So, if you’re a doctor, you’ll need to set up a standard LLC.
You may also incorporate a professional corporation. The corporate name of your practice must contain either “P.C.” or “Professional Corporation.” However, if you’re a smaller practice and primarily want the asset protection and tax benefits an LLC provides, you may find an LLC to be a better fit.
An LLC in Missouri, when established by a physician, consists of one or more LLC members – all of who share in the ownership of the business. As noted, an LLC protects its members from creditors or lawsuits for various types of financial debts or personal injury claims.
Defining Professional Services in Missouri
The LLC Act in Missouri does not reference professional services. It only states that an LLC may be established for a lawful business purpose, defining a business as a trade, profession, or occupation.
Some states often define professionals for LLC purposes, such as physicians, dentists, lawyers, veterinarians, professional engineers, and accountants. Missouri does not do this for LLCs.
However, the law in the state does feature a list of professions that may form a professional corporation. Again, this list may include doctors, attorneys, chiropractors, architects, engineers, or accountants.
Also, some of the regulatory laws or licensing boards in the state require certain professionals, such as veterinarians or accountants to follow specific guidelines for forming an LLC.
What You’ll Need to Form an LLC as a Missouri Physician
If you’re a physician in Missouri, you’ll need to meet the following requirements to form an LLC:
- You must possess a state license for each LLC member
- You should have the applicable approval from your licensing board
- You need to file Articles of Organization with the Missouri Secretary of State (SOS)
You may either file the articles online or download the Articles of Organization from the SOS website. This form can be used with any type of LLC. If you’re filing online, you’ll pay $50 while paper filings are charged $105.
You’ll need to choose a unique name for your LLC, so you’ll need to check the SOS database to ensure the name is not taken. You must abide by the licensing authorities in your state.
You’ll also need to retain the services of a resident agent to file and accept documents related to your LLC. They should reside in Missouri and be available from 8:00 am to 5:00 pm during the workday week. A resident agent is used for both LLC and corporation businesses.
Why It’s Important to Create an Operating Agreement
According to Missouri LLC law, LLC members must draft a written operating agreement. This internal document is not filed but allows a company to resolve internal disputes, if or when they may happen.
If an operating agreement is not created, the existing articles or organizations are used instead. However, it’s best to have the document on hand so members and outside interested parties have a clear idea about your operations.
How an LLC Can Protect You
As a doctor, an LLC will protect your personally from:
- Creditors seeking unpaid debts your practice owes
- The malpractice liability of other LLC members
- People who sue you for a personal injury – incidents that have nothing to do with malpractice or torts, such as a slip-and-fall
You’ll also need to make sure you have the minimum required amount of malpractice insurance so you can ensure protection in these cases.
Your Personal Obligations
As a physician who operates an LLC, you’re personally obligated in the following cases:
- You’ve guaranteed repayment of a business loan
- You get involved in professional malpractice
- You negligently commit a tort, such as an assault
You are not protected from personal malpractice, thus the reason for professional liability insurance.
How an LLC is Different from a Professional Corporation (PC)
LLCs are newer than professional corporations and are designed with fewer restrictions. Below are the main differences:
- LLCs are made up of members while professional corporations are composed of shareholders.
- LLC membership is based on the interests of members while PC ownership is dependent on shares of stock.
- LLCs represent a pass-through tax entity so tax obligations are only recorded on a member-owner’s personal income tax return. PCs have individual tax obligations, so the owner and company each are taxed.
Moreover, things can get complex if you set up a PC. Some PCs elect to become an S corporation, which gives them pass-through tax privileges.
Needless to say, you need to work with a company that can help you with establishing your practice as a corporation or LLC in Missouri. That way, you’ll be able to determine the best entity for you.
Call the Corporation Center About Forming an LLC in Missouri
If you’re a doctor or licensed professional, you can either set up an LLC in Missouri or a PC. To get the full details, contact The Corporation Center for further information. Call (800) 580-4870 now.