Practice Management

Like many states that prohibit corporate practice of medicine, Kansas generally prohibits ownership of a physician practice by a non-physician.  I have some docs who are interested in owning their share of the practice in an entity such as an LLC for tax reasons.  That's fine in Kansas as long as the ownership doesn't pass to a non-physician.  The concern of the group is that we wouldn't have any way to prevent or necessarily even know about a change of ownership of a separate entity that owns the share of the practice, which could jeopardize the legal standing of the practice.

Does anyone have a structure that allows ownership of the practice share by an entity in a state that prohibits non-physician ownership?  If so, what safeguards are in place to prevent ownership of the shareholding entity by a non-physician?

Thanks

Dave

Like many states that prohibit corporate practice of medicine, Kansas generally prohibits ownership of a physician practice by a non-physician.  I have some docs who are interested in owning their share of the practice in an entity such as an LLC for tax reasons.  That's fine in Kansas as long as the ownership doesn't pass to a non-physician.  The concern of the group is that we wouldn't have any way to prevent or necessarily even know about a change of ownership of a separate entity that owns the share of the practice, which could jeopardize the legal standing of the practice.

Does anyone have a structure that allows ownership of the practice share by an entity in a state that prohibits non-physician ownership?  If so, what safeguards are in place to prevent ownership of the shareholding entity by a non-physician?

Thanks

Dave

Like many states that prohibit corporate practice of medicine, Kansas generally prohibits ownership of a physician practice by a non-physician.  I have some docs who are interested in owning their share of the practice in an entity such as an LLC for tax reasons.  That's fine in Kansas as long as the ownership doesn't pass to a non-physician.  The concern of the group is that we wouldn't have any way to prevent or necessarily even know about a change of ownership of a separate entity that owns the share of the practice, which could jeopardize the legal standing of the practice.

Does anyone have a structure that allows ownership of the practice share by an entity in a state that prohibits non-physician ownership?  If so, what safeguards are in place to prevent ownership of the shareholding entity by a non-physician?

Thanks

Dave

Thanks, Paul and Keith

The risk we are trying to figure out how to mitigate is the risk of a transfer contrary to the provisions of the relevant agreements.  What happens if a shareholder ignores their contractual obligation or the operating agreement and allows a non-physician to own a share of their entity, and the group is operating illegally as a result?  It's hard to see how the practice would have visibility on who owns the entity that owns the share of the practice.

Dave

Like many states that prohibit corporate practice of medicine, Kansas generally prohibits ownership of a physician practice by a non-physician.  I have some docs who are interested in owning their share of the practice in an entity such as an LLC for tax reasons.  That's fine in Kansas as long as the ownership doesn't pass to a non-physician.  The concern of the group is that we wouldn't have any way to prevent or necessarily even know about a change of ownership of a separate entity that owns the share of the practice, which could jeopardize the legal standing of the practice.

Does anyone have a structure that allows ownership of the practice share by an entity in a state that prohibits non-physician ownership?  If so, what safeguards are in place to prevent ownership of the shareholding entity by a non-physician?

Thanks

Dave

Thanks, Paul and Keith

The risk we are trying to figure out how to mitigate is the risk of a transfer contrary to the provisions of the relevant agreements.  What happens if a shareholder ignores their contractual obligation or the operating agreement and allows a non-physician to own a share of their entity, and the group is operating illegally as a result?  It's hard to see how the practice would have visibility on who owns the entity that owns the share of the practice.

Dave

Like many states that prohibit corporate practice of medicine, Kansas generally prohibits ownership of a physician practice by a non-physician.  I have some docs who are interested in owning their share of the practice in an entity such as an LLC for tax reasons.  That's fine in Kansas as long as the ownership doesn't pass to a non-physician.  The concern of the group is that we wouldn't have any way to prevent or necessarily even know about a change of ownership of a separate entity that owns the share of the practice, which could jeopardize the legal standing of the practice.

Does anyone have a structure that allows ownership of the practice share by an entity in a state that prohibits non-physician ownership?  If so, what safeguards are in place to prevent ownership of the shareholding entity by a non-physician?

Thanks

Dave

Thanks, Paul and Keith

The risk we are trying to figure out how to mitigate is the risk of a transfer contrary to the provisions of the relevant agreements.  What happens if a shareholder ignores their contractual obligation or the operating agreement and allows a non-physician to own a share of their entity, and the group is operating illegally as a result?  It's hard to see how the practice would have visibility on who owns the entity that owns the share of the practice.

Dave

Like many states that prohibit corporate practice of medicine, Kansas generally prohibits ownership of a physician practice by a non-physician.  I have some docs who are interested in owning their share of the practice in an entity such as an LLC for tax reasons.  That's fine in Kansas as long as the ownership doesn't pass to a non-physician.  The concern of the group is that we wouldn't have any way to prevent or necessarily even know about a change of ownership of a separate entity that owns the share of the practice, which could jeopardize the legal standing of the practice.

Does anyone have a structure that allows ownership of the practice share by an entity in a state that prohibits non-physician ownership?  If so, what safeguards are in place to prevent ownership of the shareholding entity by a non-physician?

Thanks

Dave

Thanks, Paul and Keith

The risk we are trying to figure out how to mitigate is the risk of a transfer contrary to the provisions of the relevant agreements.  What happens if a shareholder ignores their contractual obligation or the operating agreement and allows a non-physician to own a share of their entity, and the group is operating illegally as a result?  It's hard to see how the practice would have visibility on who owns the entity that owns the share of the practice.

Dave

Like many states that prohibit corporate practice of medicine, Kansas generally prohibits ownership of a physician practice by a non-physician.  I have some docs who are interested in owning their share of the practice in an entity such as an LLC for tax reasons.  That's fine in Kansas as long as the ownership doesn't pass to a non-physician.  The concern of the group is that we wouldn't have any way to prevent or necessarily even know about a change of ownership of a separate entity that owns the share of the practice, which could jeopardize the legal standing of the practice.

Does anyone have a structure that allows ownership of the practice share by an entity in a state that prohibits non-physician ownership?  If so, what safeguards are in place to prevent ownership of the shareholding entity by a non-physician?

Thanks

Dave