Business Entity & Licensing

FinCEN's March 21, 2025 interim final rule, effective March 26, 2025, exempts all entities formed in the United States ('domestic reporting companies') and US-person beneficial owners from the Corporate Transparency Act's beneficial-ownership reporting requirements; Treasury has stated it will not enforce penalties or fines against US citizens or domestic reporting companies. The reporting universe shrank from ~32 million entities to under 12,000.

Under the March 2025 IFR, only entities formed under the law of a foreign country and registered to do business in any US state or tribal jurisdiction must file BOI; foreign reporting companies are not required to report any US-person beneficial owners.

The IFR remains in interim status, with FinCEN accepting public comments through May 25, 2025 and intending to issue a final rule later in 2025; ongoing CTA-related litigation (Texas Top Cop Shop v. Garland, Smith v. Treasury) means policy could shift again before finalization.

California does not allow a PLLC for medical practice: the Moscone-Knox Professional Corporation Act (Corp. Code §§13400-13410) requires licensed professionals to organize as a professional corporation, and Corp. Code §17701.04(b)/(e) bars LLCs from rendering professional services unless a California licensing statute expressly authorizes it (no such authorization exists for medicine). The Act requires at least 51% of shares be held by licensees in the corporation's primary profession.

Texas permits both a Professional Limited Liability Company (PLLC) and a Professional Association (PA) for medical practice under Texas Business Organizations Code Chapters 301 and 304. The Texas foreign-LLC qualification fee is $750 (one-time) — among the highest in the country.

New York requires that each member of a professional limited liability company (PLLC) formed to provide medical services be licensed under NY Education Law Article 131. Foreign qualification triggers a publication requirement under LLC Law §802: within 120 days of filing the Application for Authority, the foreign LLC must publish a notice once a week for six consecutive weeks in two newspapers. Filing fee $250; certificate of publication $50; biennial statement fee $9.

Florida permits medical practice through either a Professional Corporation (Ch. 607 + Ch. 621) or a Professional Limited Liability Company (Ch. 608/605 + Ch. 621). Florida foreign-LLC initial registration is $125; annual report due May 1 each year at $138.75 with a $400 late penalty.

Pennsylvania permits a Restricted Professional Company (PLLC, 15 Pa.C.S. Ch. 88) for medical practice but only physicians may be members; the annual registration fee is $610 per member with a $500 minimum due April 15.

Illinois permits both a Professional Service Corporation (805 ILCS 10) and a Professional Limited Liability Company (805 ILCS 185). Under 805 ILCS 185/13, all managers of a medical PLLC must be licensed under the Medical Practice Act of 1987. New Jersey does not use the PLLC designation but permits healthcare LLCs under N.J.A.C. 13:42-7.2 if all owners are NJ-licensed healthcare professionals.

Michigan permits medical PLLCs under MCL 450.4904. Ohio permits physicians to practice through a Chapter 1705/1706 LLC, a Chapter 1701 corporation, or a Chapter 1785 Professional Association. Virginia permits both PC (Va. Code Title 13.1, Ch. 7) and PLLC (Title 13.1, Ch. 13) with identical 100%-licensed-member requirements.

North Carolina requires Medical Board pre-approval (NCGS 55B) for any ownership change of a medical PC/PA/PLLC; application fee $50, renewal $25. Georgia does not offer a PLLC entity for medical practice — medical professionals organize either as a PC or as a regular LLC; PC formation requires initial approval from the Georgia Composite Medical Board before filing with the Secretary of State.

Delaware LLC formation costs $110 with a flat $300 annual LLC franchise tax due June 1; Delaware does not require an LLC annual report. Wyoming LLC formation is $100 with an annual report license tax minimum of $60 due the first day of the LLC's anniversary month.

Wyoming Statute 17-29-503(g) makes the charging order the sole and exclusive remedy by which a judgment creditor may satisfy a judgment from a Wyoming LLC member's transferable interest, explicitly extending the exclusive-remedy protection to single-member LLCs. This is widely considered the strongest charging-order protection in the US for closely-held LLCs.

California's foreign-LLC registration fee is $70 + $20 SOI fee; every LLC organized or doing business in CA must pay the $800 annual franchise tax. LLCs with CA-source income of $250,000+ pay additional graduated fee ranging from $900 (income $250K-$499K) up to $11,790 (income $5M+).

The MSA fee invoiced by the MSO to the PC is presumptively taxable in three states with broad gross-receipts regimes: New Mexico GRT, Hawaii GET (4% state + up to 0.5% county), Washington B&O (every legal entity a separate taxpayer; aggressive DOR enforcement). South Dakota imposes its 4.5% state sales tax on services by default.

An EIN is obtained by filing IRS Form SS-4; online application via IRS EIN Assistant issues an EIN instantly, fax takes ~4 business days, mail takes up to 4 weeks. The MSO and the PC are separate taxpayers and require separate EINs. The Responsible Party named must be an individual (not entity) who controls or directs the entity.

Personal guarantees on commercial leases, high-risk merchant agreements, and bank credit facilities are voluntary waivers of LLC/corporate veil protection: signing makes the guarantor personally liable despite the entity. Telehealth founders entering a 5-10 year commercial lease and high-risk merchant agreement with a 180-day rolling reserve will routinely be asked to personally guarantee both.

Founder personal liability for unpaid taxes survives the MSO/PC structure under two doctrines: IRS Trust Fund Recovery Penalty under IRC §6672 imposes 100% personal liability on any 'responsible person' who willfully fails to pay over employment trust-fund taxes (joint and several across multiple responsible persons), and state 'responsible person' sales-tax statutes (CA: CDTFA can pursue collection against personnel with control or supervision; NY broadly defines responsible persons).

Alter-ego or veil-piercing risk in the MSO/PC structure arises when courts find the two entities are not operated at arm's length. Courts examine commingling of funds, observance of corporate formalities, capitalization adequacy, arm's-length transactions, and confused records; non-compliance with corporate formalities is one of the strongest factors. MSA must reflect arm's-length pricing, MSO and PC must maintain separate bank accounts, books, minutes, payroll.

Beyond physician licensure, the MSO entity itself may need state-specific telehealth-platform registrations: Florida operates a Telehealth Provider Registry. About 20 states currently maintain some form of telehealth registration. Wholesale Distributor Permits and Third-Party Logistics Provider Permits apply only if MSO takes title to or directs disposition of legend drugs; MSO that doesn't handle physical inventory generally avoids these.

State of MSO formation: Delaware vs Wyoming vs home state

Medical-practice entity type: traditional PC vs PLLC