Article Date:
January 2012


Word Count:
976

 

 

Professional Corporation as a C Corporation Is a Personal Service Corporation


Question

 

I have a client who is a cardiologist who receives income from hospital referrals but is paid primarily by insurance companies. Would this be considered personal service income and preclude him from operating as a C corporation? (M.S., Philadelphia, Pa.)

 

Answer

 

Yes, it could be personal service income, but even if it is, it doesn’t preclude him from operating as a C corporation.

 

Why Incorporate?

 

First, why does your client want to incorporate?

 

Health care professionals usually incorporate to limit their liability. However, the limited liability afforded to professional corporations is not as great as your client may think.

 

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