Business Structure for Cardiologists: Choosing the Right Entity for Your Practice

If you’re a cardiologist planning to open a private practice, or restructure an existing one, your choice of business entity can affects everything from how you’re taxed to how well your personal assets are protected.

The right business structure for a cardiologist can help you grow with less liability, better financial control, and a more secure foundation for future retirement or practice sale.

In this article, we’ll break down the most common entity options, explain how they apply to physicians, and help you make a more confident, informed decision.

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Why Business Structure Matters for Cardiologists

Cardiology is a high-liability, high-income specialty. As a result, your business structure must do more than just meet regulatory requirements. A few other things a good plan can do are:

• Protect your personal assets from lawsuits or debt

• Allow for efficient tax planning

• Support future practice growth or partnership opportunities

• Make it easier to bring on associates or plan your exit when the time comes

This decision should be made intentionally, ideally with guidance from a legal and financial advisor who understands physician practices.

Common Business Structures for Cardiologists

Here are the main entity types cardiologists typically consider — and what each offers.

1. Sole Proprietorship (Not Recommended)

This is the simplest business form, but could also be more risky. If you’re practicing without a legal entity, you’re a sole proprietor by default.

Why it may not be the best choice:

• No legal separation between personal and business assets

• Full personal liability for malpractice, debt, or lawsuits

• Limited tax planning flexibility

That being said, it could work in certain scenarios.

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2. Professional Corporation (PC) or Professional Limited Liability Company (PLLC)

Many states require physicians to form a professional entity, such as a PC or PLLC, due to licensing rules. These structures are designed specifically for licensed professionals.

Benefits:

• Limits liability for business obligations (but not malpractice)

• Can make you eligible for certain tax benefits

• Looks more credible to patients and partners

• Serves as the foundation for adding S-Corp or C-Corp tax status

When to use it:
This is typically the starting point for most cardiologists launching a practice.

3. S-Corporation (Tax Election)

An S-Corp isn’t a legal entity, it’s a tax classification that you can apply to your PC or PLLC. It allows you to split your income between salary and distributions, potentially reducing self-employment tax.

Benefits:

• Potential tax savings on income above reasonable compensation

• Can contribute to retirement plans more efficiently

• Adds flexibility for profit-sharing and dividends

What to know:
You’ll need to pay yourself a reasonable salary and follow stricter payroll and accounting rules. But for high-income cardiologists, the tax savings can be significant.

4. C-Corporation (Less Common)

A C-Corp is a separate taxable entity. It’s less commonly used for solo cardiologists but may be appropriate for multi-physician groups, those planning to retain earnings, or practices exploring outside investment.

Benefits:

• Lower flat corporate tax rate (currently 21%)

• Easier to offer fringe benefits like health insurance or profit-sharing

• Attractive for group practices with multiple shareholders

Downside:
C-Corps can be subject to double taxation. Once at the corporate level and again at the shareholder level when profits are distributed.

When to consider it:
If you're building a larger cardiology group, planning to reinvest heavily in growth, or working with a medical MSO (Management Services Organization), this may be worth exploring.

5. Multi-Entity Structures (Advanced)

As your practice grows, you might benefit from separating different parts of the business into multiple legal entities. For example:

• One entity owns the office building (real estate LLC)

• Another owns the practice operations (PLLC or PC)

• A third entity manages branding or intellectual property

Benefits:

• Enhanced asset protection

• Easier tax optimization

• Simplifies future sale or succession planning

Best for:
Established practices with real estate, multiple owners, or plans to expand into consulting, imaging, or ancillary services.

Choosing the Right Structure: Key Considerations

Here are a few guiding questions to help you choose:

• Are you practicing solo or with partners?

• Do you plan to grow the practice or stay lean?

• Will you own your office or lease space?

• Do you have plans to sell, retire, or bring in associates?

• How important is tax efficiency vs. administrative simplicity?

The right structure depends not just on where you are now — but where you’re going.

Ready to Launch or Restructure Your Practice?

Our advisors help cardiologists like you choose the right business structure, protect their assets, and set up the legal and financial foundation for long-term success.

Whether you're just getting started or rethinking your current setup is essential.

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FAQ: Business Structure for Cardiologists

What is the best business structure for a cardiologist starting a solo practice?
Most solo cardiologists start with a Professional Corporation (PC) or PLLC and elect S-Corp tax status to gain liability protection and potential tax savings.

Can a cardiologist operate as a sole proprietor?
Technically yes, but it’s not recommended. Sole proprietors have no legal separation between business and personal assets, which increases liability risk.

Should cardiologists consider an S-Corp or C-Corp?
S-Corps are more common for solo or small-group cardiologists due to the potential for self-employment tax savings. C-Corps are better suited for large groups or practices with outside investment.

Do I need a separate entity to own my office building?
It’s a smart idea. Many cardiologists use a separate LLC to hold real estate, then lease it to their practice. This provides tax benefits and asset protection.

When should I update or restructure my business entity?
If you’re growing, adding partners, purchasing real estate, or preparing for retirement or a sale, it’s a good time to revisit your structure with an advisor.