Corporate Formalities for a PC: Minutes, Bylaws, Separate Books and Why They Matter

Why Formalities Matter More for a PC

A professional corporation's protection and its credibility both rest on being treated as a real, separate entity. Its liability shield depends on maintaining corporate formalities such as minutes, bylaws compliance and arm's-length transactions, more explicitly than an LLC's operating agreement does. And because the structure is held together by contract rather than equity, the corporate record is the evidence that the PC, not the management company, is making the clinical decisions.

The Core Records

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Separate Money, Separate Books

The PC and the management company each need their own bank accounts, books, tax filings and payroll, with no commingling. Patient revenue lands in the PC's account, and transfers to the management company happen on a schedule and against invoices. The ledger should show the structure working the way the contracts say it does.

How the Clinic Presents Itself

Patient-facing materials, consents, receipts and superbills should name the PC as the provider. The management company appears as the administrator, if at all. A clinic whose consent forms and receipts carry the management company's name as the provider is advertising the wrong structure to every patient.

Make It a Habit

Put the annual filings, board meetings and document reviews on a calendar and assign someone to own them. The records that matter are the ones created at the time of the decision, not reconstructed later, and a regulator can usually tell the difference.

Disclaimer

This article is general educational information, not legal advice. State law varies and changes, and depends on the facts of a clinic's structure, so confirm specifics with health care regulatory counsel.