Our Charleston corporate attorneys provide legal counsel to medical professionals seeking to establish a South Carolina business entity or restructure an existing one. Our business law firm offers reasonable flat-fee or fixed-fee services for the majority of business organizational matters. Please contact one of our attorneys for more information if you are starting a new business and have questions as to what type of business entity is the best for your medical practice.

Our law firm often receives client inquires as to whether a physician practice should be formed as a “medical corporation.”  A medical corporation is typically organized under a state’s Medical Corporation Act solely for those licensed medical practitioners that are subject to a Medical Practice Act.  However, South Carolina has no such statute.   Medical professionals practicing medicine through a business entity may choose to form a partnership, limited liability partnership, limited liability company, corporation, professional corporation, or other public or private legal entity authorized under South Carolina law.

It is important for every medical professional seeking to organize a company review the business entity statutes and professional licensing statute to determine which entity will be most appropriate.  For example, the licensing statute for optometrists and opticians indicate that only licensed persons can practice such professions, and the requirements for licensing clearly indicate that a corporation could not qualify.  See SC Code Ann §§ 40-37-90 and 40-38-20.

The following discussion briefly discusses the various business entities in which a medical professional in South Carolina should consider.

Choosing a Name For Your Medical Practice

Selecting a name for your medical practice should not be taken lightly.  It should be noted that although the proposed name of your medical practice may be available under the Secretary of States database for registered businesses in South Carolina, this does not mean that the name is available under state and federal trademark laws.  Any new business owner in the preliminary stages of forming a medical practice should engage a trademark attorney to conduct a thorough screening of the proposed company name on all state trademark databases and the federal database to ensure the name is available for use.  It often happens that a business owner will organize a business entity only later to receive a cease and desist or trademark infringement claim because the name they are using conflicts with a state or federal registered trademark.   Therefore, it is very important to ensure that the company  name is not only available with the Secretary of State but also available in the state and federal trademark databases.

General Corporation

For more than a century, the corporation has been the principal form a business enterprise in the United States.  The corporation is the most complex of business structures because it acts as a legal entity that exists separately from its owners.  It should be noted that there is not as much flexibility in structuring corporate agreements to modify or supersede the corporation statute as compared with limited liability company agreements and partnership agreements.

A South Carolina corporation is governed by the South Carolina Business Corporation Act of 1988 (the “Act”). A corporation is a business entity separate and distinct from its officers and shareholders, and its debts are not the individual indebtedness of its shareholders.

A South Carolina corporation may be formed with by satisfying the following minimum requirements.  However, simply satisfying the minimum requirements does not necessarily afford the business owners with all the advantages the corporate entity offers its business owners. The articles of incorporation must be signed by one or more incorporators and filed with the Secretary of State.  There is a filing fee of $135, which includes the initial state corporate tax and corporate registration fee.  An attorney licensed to practice law in South Carolina must sign a certificate certifying that the requirements of incorporation have been complied with.  The incorporators or initial Board of Directors complete the incorporation process by appointing officers and adopting Bylaws for the corporation.  Although not required, a Shareholder Agreement should be developed for the corporation setting forth the management structure of the corporation and regulating the internal affairs of the corporation.

There are several other considerations that should be taken into account when forming a corporation to provide medical services.  All shareholders, directors and officers of the corporation must be duly licensed to practice medicine in South Carolina.  No person who is not so licensed shall have any part in the ownership, management or control of the corporation.  The purpose clause in the articles of incorporation should be stated as follows:  To own, operate and maintain an establishment for the study, diagnosis and treatment of human ailments and injuries, whether physical or mental, and promote medical, surgical and scientific research and knowledge; provided that medical or surgical treatment, advice or consultation will be given by employees of the corporation only if they are licensed to practice medicine in South Carolina.  If not provided for in the bylaws, the articles of incorporation shall state a price or a method of determining a fixed price at which the corporation or its shareholder may purchase the shares of a deceased shareholder or a shareholder no longer qualifies to own shares in the corporation.

Professional Corporation

The Professional Corporation Supplement defines “professional services” as: …a service that may be rendered lawfully only by a person licensed or otherwise authorized by a licensing authority in South Carolina to render the service and that may not be lawfully rendered by a corporation under the statute.  Further, the supplement provides that a corporation may elect professional corporation status solely for the rendering of professional services, including services ancillary to them, within a single profession.  Therefore, in order to form a professional corporation in South Carolina you must first determine whether your profession is authorized under the supplement.  For example, stock brokers are not governed by the provisions of Title 40.

Unlike some states, the South Carolina Professional Corporation Supplement does not require any professions (e.g., physicians) to practice through a professional corporation.  Unless a regulatory board under Title 40 requires its professionals to render services through a professional corporation, professionals may choose a different entity in which to conduct their business.  In other words, medical practitioners may form limited liability companies (LLCs) and partnerships to render professional services.  Therefore, it is important to review (or contact one of our business attorneys) Title 40 to determine which professions must render services in the professional corporation format, as opposed to the regular corporate, limited liability company, or partnership format.

If you are deciding what type of business entity is the best choice for a medical practice in South Carolina, please contact our Charleston corporate lawyers by giving us a call - 843-564-5115.

Limited Liability Company

The South Carolina limited liability company (LLC) pursuant to the Uniform Limited Liability Company Act of 1996 is a legal entity separate and distinct from its members and managers.   Over the past few decades, the limited liability company form has become the most popular choice of business entity form many professionals, including medical professionals.   One of the reasons the LLC form is popular with professionals is due to the flexibility it offers regarding tax (it may be taxed as sole proprietorship, partnership, S corporation or C corporation) and operations.  The LLC may also provide greater asset and creditor protections than any other business entity.  Moreover, the LLC is one of the least costly South Carolina business organizations to establish and operate.

As noted above, one of the primary advantages in choosing the LLC structure is the considerable flexibility of the operating agreement.  The members of an LLC have wide latitude to vary most of the provisions of the LLC Act through a written LLC agreement, even provisions that would otherwise appear to be mandatory – see discussion below.  This contractual freedom is significantly broader than the authority granted under the Uniform Partnership Act (UPA) to the partnership agreement or the Corporation Act to the articles of incorporation and bylaws.  As a result, the LLC structure, including the LLC agreements, can be customized to a greater degree as compared to South Carolina partnership agreements and corporate agreements.

Unlike many other state statutes, South Carolina LLC statute does not offer a special designation for professional LLC’s (i.e., LLC’s organized solely with members who practice or provide professional services, such as physicians).  However, because LLC’s are creatures of contract and its members are free to contract as they choose, medical professionals of an LLC may provide that only licensed physicians may may be members or owners of the LLC, and the provision of services may be limited solely to the provision of medical services in which the members are licensed to practice.  For example, the operating agreement may provision that the LLC shall only offer one type of professional service and the medical services must be offered through licensed South Carolina physicians to perform the professional services.


The Uniform Partnership Act governs a South Carolina partnership. A partnership is an association of two or more persons that establishes co-ownership of a business for profit. The existence of a South Carolina partnership depends on the relationship between the parties and whether the parties came together to carry on a venture for their common benefit, each contributed property or services and had a community of interest in the profits of the business venture. A South Carolina partnership does not insulate the general partners from the debts and liabilities incurred by the business – they are joint and severally liable. This partnership entity does, however, provide the advantage of a pass-through taxation and provides the partners with the ability to control and establish their relationships with great flexibility.  For medical professionals, due to the exposure of liability, this business entity may not be the best choice to provide medical services.

Contact our Charleston Corporate Lawyers

If you are medical professional and are deciding on the best choice of business entity for your medical practice in South Carolina, please contact our Charleston corporate lawyers by giving us a call, filling out the contact form to your right, or sending one of our lawyers an email.