Question

J.D. Dorian just finished a residency in internal medicine and wants to go into practice with Dr. Gregory House, Dr. John Zoidberg, Dr. Nick, Dr. Julius Hibbert, and Dr. Leonard “Bones” McCoy. J.D. tells you that while he needs to practice with other physicians for call coverage and for other reasons, he does not want to be personally liable should the other physicians be found guilty of malpractice (and he is particularly worried about this due to their reputation). You discuss various incorporation options with him, but he tells you that he would like to form a partnership. What business form would you recommend to him and why?

Answer 1

The primary concern for Dorian is that he wants no personal liability in case any other physician that he is working with, is found guilty of malpractice. Incorporation is the best way to go if one is seeking to avoid personal liability in case of some undesirable event with the company. However, a corporation also entails high costs for keeping records and paperwork.

As far as forming a partnership is concerned, a limited partnership would mean that if Dorian joins as a limited partner, he would not have any control over the partner but would be shielded from any responsibility for the partnership.So, it would really depend upon the amount of control that he wants to exercise in the partnership.

He can also consider forming an LLC (Limited Liability Company) as in an LLC, the owners are not personally liable for the Company's liabilities. It also has the advantage that all profits and losses are passed through to owners without taxing the business.

So, an LLC seems to best fit Dorian's requirements.