Healthcare providers launching or restructuring a medical practice face entity selection decisions that are more constrained and consequential than those confronting most other business owners. While the fundamental principles of limited liability protection, tax efficiency, and operational flexibility apply across all industries, medical practices must navigate an additional layer of state-specific healthcare regulations that significantly narrows the range of permissible structures. The corporate practice of medicine doctrine, applicable in many states, prohibits corporations from employing physicians or exercising control over medical decision-making. Professional licensing requirements dictate who may hold ownership interests in a medical practice. Reimbursement structures from both government and private payers may favor certain entity types over others. These constraints make entity selection for healthcare providers a decision that requires both business judgment and regulatory awareness. The Corporate Practice of Medicine Doctrine The corporate practice of medicine doctrine represents the most significant regulatory constraint on medical practice formation. In states that enforce this doctrine, lay corporations cannot employ physicians, own medical practices, or exercise control over clinical decision-making. The rationale is that a physician's medical judgment should be independent of corporate profit motives. The practical impact varies considerably by state. Some states enforce the doctrine strictly, prohibiting any form of corporate employment of physicians. Others have carved out exceptions for certain practice settings, such as hospitals, health maintenance organizations, or academic medical centers. Several states have effectively abandoned the doctrine through legislative action or judicial interpretation. In states that enforce the doctrine, physicians must form professional entities, such as professional corporations or professional limited liability companies, that restrict ownership to licensed practitioners. These structures allow multiple physicians to practice together while maintaining compliance with state medical board regulations and the corporate practice doctrine. For multi-specialty practices or practices that wish to integrate ancillary services, the management services organization model provides a compliant structure. Under this arrangement, a separate management entity (which can be owned by non-physicians) provides administrative, billing, and operational support to the professional entity under a management services agreement. The professional entity retains exclusive authority over clinical decision-making and the physician-patient relationship. Entity Options for Medical Practices Professional corporations remain the most traditional structure for medical practices. They provide limited liability protection for the physician-owners while satisfying state requirements that medical practices be owned and controlled by licensed professionals. In most states, shareholders of a professional corporation must hold active licenses in the profession the corporation is organized to practice. Professional limited liability companies offer similar ownership restrictions but with the operational flexibility and pass-through tax treatment that LLCs provide. Many states now permit PLLCs for medical practices, and they have become the preferred structure for many physicians due to their simpler governance requirements and favorable tax treatment. Solo practitioners must still consider entity formation despite the apparent simplicity of their operations. Operating as a sole proprietorship exposes the physician's personal assets to claims arising from the practice. A single-member PLLC or professional corporation provides liability separation between the practice and the physician's personal estate, which is particularly important given the litigation exposure inherent in medical practice. Group practices involving multiple physicians require careful attention to governance, compensation, and departure provisions. The operating agreement or shareholders' agreement should address how clinical and administrative decisions are made, how compensation is determined and distributed, how new partners are admitted, and how departing physicians' interests are valued and purchased. Credentialing and Payer Enrollment The entity structure selected for a medical practice directly affects the credentialing and payer enrollment process. Insurance companies and government payers credential individual providers and enroll practice entities separately. Changing entity structures after initial enrollment can trigger re-credentialing requirements that may temporarily interrupt the practice's ability to bill certain payers. Medicare enrollment is particularly sensitive to entity changes. The Centers for Medicare and Medicaid Services requires that any change in practice ownership, legal structure, or practic