Sole Proprietor versus Incorporated

Home Practice Management Sole Proprietor versus Incorporated

  • Avatar cardiacpa 
    Status: Other Professional, Advanced Practice Provider
    Posts: 10
    Joined: 01/06/2019

    I’m an Physician Assistant and looking to starting doing some contract work. A hospital has asked/required me to be incorporated compared to being a sole proprietor.

    Any information on why they would require this? Tax or legal implications on their end or mine?



    CTS PA

    #179089 Reply
    jfoxcpacfp jfoxcpacfp 
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 7511
    Joined: 01/09/2016

    No. They should not be dictating what business form you operate under – it’s really none of their business. otoh, they set the rules. Entities are not required to send 1099s to corporations so maybe that has something to do with it.

    This is the first time in my career (I think) that I’ve heard of an organization¬†requiring that a contracting entity be incorporated or they won’t hire them.

    Edited to add: Implications of incorporating are great. Tax and cost of maintaining a corporation, in particular. You should discuss with an experienced CPA.

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~ 270-247-0555

    #179094 Reply
    Liked by cardiacpa
    Avatar jacoavlu 
    Status: Physician, Small Business Owner
    Posts: 1998
    Joined: 03/01/2018

    I would inquire as to whether simply forming an LLC would satisfy their requirements.

    The Finance Buff's solo 401k contribution spreadsheet:

    #179104 Reply
    Liked by cardiacpa
    Zaphod Zaphod 
    Status: Physician, Small Business Owner
    Posts: 5755
    Joined: 01/12/2016

    If you’re in California its because they think they can get around the new rules about independent contractors this way. I hope they all get taken to task for it.

    #179855 Reply

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