incorporation - liability - confusion

[WyomingRN]

This last week I met with our attorney for the purpose of getting one question answered. How much liability protection does incorporating provide to a PC? A PC is a professional service company such as an accountant, lawyer or chiropractor. One or more who provides a professional service that requires a State license. In other words, as an LLC, would there be any further protection from liability if I were to switch to a C or S corporation?

His answer was simply - NO!

Then he explained. As an attorney, if he were to file suit against a chiropractor that was incorporated, his suit would name both the corporation and the individual who provided the service as separate parties. His claim against the corporation would be for not providing properly trained personal and/or for not providing adequate personal as the case may dictate. The person who actually provided the service would also be named and the cause of action against them would be for malpractice.

In the end, any party that was found to be liable would be responsible for their own judgments. So if the individual named was found liable, the corporation was not be responsible for the amount of judgment any more than the individual would be responsible for any judgment against the corporation.

He pointed out that I should note that most attorneys are LLC and not corporations. There are exception; mostly with big law firms. But, as he pointed out, they did not incorporate for liability reasons, but rather, because it is easier to provide much greater benefits to employees as a corporation compared to an LLC.

So before you incorporate, remember that you can still be held personally liable even if you are incorporated. This is because providing nursing services is considered as providing professional service just as an attorney. If in doubt, copy and print this post and take it to an attorney to see how your State laws apply to you. I'm betting that most States are pretty much the same.

When asking questions about incorporation, I believe that too many nurses have been lead a stray by asking general question about incorporation and liability. To get the correct answer and response, you must mention that you are talking about a "professional service company".

[dreamlandeals]

Thanks