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Starting a Business: Tips for the Entrepreneurial Doctor By: Joshua Massingill, Esq. Many doctors graduate from chiropractic school ready to provide excellent patient care—only to discover that their education offered very little preparation for owning and operating a business. Clinical training is essential, but it does not teach payroll, contracts, entity structure, or risk management. Doctors of Chiropractic are hardly alone in this predicament. I spent far more time in law school studying the medieval origins of property law than learning how to run a law firm. While the former may make for interesting trivia, it is the latter that determines whether a professional practice survives. Historically, both the legal and chiropractic professions have relied on apprenticeship to fill these gaps. Many doctors learn how to operate a clinic by working for an established practitioner. But what about the doctor who opens a practice immediately after graduation—or the one whose mentor was less focused on teaching than tee times? For those doctors, the learning curve can be steep. The first and most important step is assembling the right professional team. Most small practices benefit from having an attorney, a banker, and a CPA involved from the outset. Look for advisors who regularly work with healthcare professionals and understand the regulatory and financial realities of a clinical practice. Just as important, choose professionals who can explain complex concepts clearly. Advice you do not understand is rarely useful. Cost matters, but it should not be the sole driver. The money saved by filing formation documents online or preparing taxes without guidance can be dwarfed by the long-term cost of mistakes. In many cases, paying for competent advice early is far cheaper than paying to fix problems later. From a legal perspective, one of the first major decisions facing a new practice owner is the choice of business entity. There are several options, each with advantages and disadvantages. In advising clients, I generally focus on two goals: maximizing liability protection and preserving flexibility. For many entrepreneurial doctors, those goals point toward forming a Limited Liability Company, or LLC. LLCs can offer liability protection comparable to that of a corporation, while avoiding many of the rigid formalities traditionally associated with corporate structures. This makes them easier to operate and maintain—particularly for small or closely held practices. LLCs are creatures of state law and are not, by themselves, recognized as a tax classification by the IRS. As a result, LLC owners may be able to choose how the entity is taxed—such as a sole proprietorship, partnership, S corporation, or C corporation—depending on the circumstances. Owners are referred to as “members,” and governance is handled through an operating agreement rather than corporate bylaws. LLCs may be member-managed or manager-managed, providing additional structural flexibility. Another decision is whether to form a professional entity, such as a Professional Limited Liability Company (PLLC) or Professional Corporation (PC). In Texas, some licensed professionals are required to use professional entities, while others—including Doctors of Chiropractic—have more flexibility. The defining feature of a professional entity is that ownership is restricted to members of the licensed profession. This restriction can be both a benefit and a drawback. On one hand, it limits outside investment and may make raising capital more difficult. On the other, it prevents unintended ownership transfers—for example, to a non-doctor spouse following a divorce or death. While these risks can often be addressed through a well-drafted buy-sell agreement, many doctors choose between a professional entity and a standard LLC based on long-term goals rather than legal necessity. Once an entity type is selected, your attorney will file the appropriate formation documents with the Texas Secretary of State. The next step is obtaining an Employer Identification Number (EIN) from the IRS and, if applicable, making tax elections. Your CPA should also advise you on Texas-specific issues such as franchise tax obligations and sales tax compliance. After formation, the practice must adopt its internal governing documents—such as an operating agreement, bylaws, or partnership agreement—and document major company decisions. These steps are not mere formalities; they help preserve liability protection and reduce disputes among owners. Doctors must also comply with profession-specific requirements, including chiropractic facility registration with the Texas Board of Chiropractic Examiners and compliance with regulations governing X-ray equipment and other clinical operations. Finally, remember that liability protection is not automatic. The so-called “corporate veil” can be pierced by careless behavior. Never commingle personal and business funds. Maintain separate accounts. When signing contracts, sign in your representative capacity—for example, “Doe Chiropractic, PLLC, by Dr. John Doe, President”—to avoid unintentionally assuming personal liability. For those willing to take the leap, owning a practice can be both financially and personally rewarding. By surrounding yourself with experienced professionals and making thoughtful decisions early, you significantly increase the odds of long-term success. This article is intended as legal education, not legal advice. You should consult with qualified counsel regarding your specific circumstances. This article is courtesy of Joshua Massingill, TCA Attorney and Lobbyist of Statecraft, LLC and TCA Affiliate Member Massingill Attorneys and Counselors at Law.