How to Start a Medical Practice in New York

Step 1: Obtain a Certificate of Authority

In order to establish a medical practice in New York, one must first obtain a Certificate of Authority. The NYS Department of Education, Office of the Professions will issue a Certificate of Authority upon receiving the proposed legal formation documents, license information of the practitioner, filing fees, and other legal documents depending on the circumstances.

Step 2: Form a Professional Business Entity

Most clients in the medical field choose to form a PLLC business entity (Professional Service Limited Liability Company). This is a great option for solo practitioners or partners starting a small medical office in New York. Other options include a PC (Professional Service Corporation) or LLP (Limited Liability Partnership) although these options are not as popular in my experience.

Setting up a PLLC provides the owners many benefits, namely, limited liability protection and protection of personal assets. Note, that professionals can’t form a regular LLC or Corporation; the New York Department of State requires that the company’s organizational documents are compliant for professional service companies and must be accompanied by a Certificate of Authorization issued by the New York State Department of Education, Office of the Professions.

The name of the new practice must conform with the naming restrictions implemented by the New York State Education Department. We do a name a clearance search in advance of every formation project make to sure that the name is available for registration and compliant with their restricted words and phrases. The name of the company must also accurately describe the professional’s practice and certain documentation may be required if any specialty certifications are held by the Members.

Step 3: Open a Bank Account

Once your entity is established you’ll need an EIN number (Employer Identification Number) to open a business bank account. These are also referred to as a Tax ID Number and are issued by the IRS. We include these as part of our professional practice formation services.

Step 4: Open Your Business

Once the company is legally established you can secure malpractice insurance, hire staff, sign a commercial lease and hang your shingle. If you’re interested in starting your own medical office contact us for a free phone consultation. We specialize in working with Physicians, Mental Health Practitioners, Registered Nurses, Nurse Practitioners and other health care professionals in New York.

Convert an LLC into a PLLC, is it possible?

We often get asked if it is possible to convert an LLC to a PLLC in New York. The short answer is no. Generally this question comes from a professional service provider who has mistakenly set up a regular LLC for a professional practice and is looking for a quick way to get back in compliance with the State of New York. There’s no LLC to PLLC conversion option because the entities and their set up process is much different, despite the similar name.

The PLLC application process starts by applying for a Certificate of Authority with the New York State Education Department. In order to obtain their consent, the licensee must be in good standing and the proposed Articles of Organization must be in compliance with their PLLC approval process. Without a Certificate of Authority, the proposed business will not be able to file with the New York State Department of State.

Regular LLCs in New York are not required to go through this credential checking process, thus there would be no way for the NYS Department of State to confirm whether or not the proposed business is actually licensed to provide professional services if an LLC was allowed to convert to a PLLC ex post facto. From a consumer protection standpoint, it makes sense. Does the general public want their Doctors and Lawyers to be licensed and in good standing? Of course. However, from a start up perspective the high degree of PLLC scrutiny makes the application process more difficult.

If you need assistance filing a PLLC application send us an email to schedule a free phone consultation.

Forming a PLLC for a Retired Attorney

PLLCs are a great choice of business entity for retired attorneys in New York State. We’ve set up numerous PLLCs for retired attorneys who still want to work with a few select clients, but are otherwise retired from practicing law.

PLLCs are popular among attorneys for many reasons. First and foremost, PLLCs give the owner limited liability protection. PLLCs also allow for flow-through taxation by default, which means that the entity itself incurs no entity-level federal or state taxes. Instead, the owner pays self-employment taxes on the income earned. PLLCs are also quick to set up and require much less paperwork than the alternative, a professional corporation.

PLLC maintenance is also very easy in New York. The entity only needs to be renewed with the New York Department of State every 2 years and we handle the entire renewal process for clients using our Registered Agent service.

If you are a retired or retiring attorney and need to set up a PLLC for a law practice send us an email and we’ll schedule a free phone consultation or visit the PLLC Formation Service page for more details.

LLCs for Freelancers and Independent Contractors

Forming an LLC is a smart choice for self-employed freelancers and independent contractors. In NYC, many employers actually require their contractors to have an LLC in order to secure contract work. LLCs help limit both the liability of the employer and the contractor, thus it's no surprise that LLCs are often a prerequisite for contract work eligibility.

Another benefit for freelancers is that an LLC has an EIN Number, therefore you won't need to use your personal social security number on all of those 1099s. Your privacy is further insulated come tax time and the IRS can easily associate your LLC and EIN for tax purposes. Lastly, setting up an LLC looks very professional, so if you work in a competitive field it may help you stand out.

If you are a freelancer or independent contractor give us a call for a free phone consultation.

Welcome to The Thomas Law Firm PLLC Blog!

Are you considering setting up an LLC in New York? If so, you have come to the right place. Our Attorney provides business formation advice, LLC filing services, registered agent services, and many other helpful services for those about to embark on a new journey. Check out the information on this website and give us a call for a free phone consultation.