Doctor Side Gig? How to Choose Between a PLLC, PC, or LLC

Doctor Side Gig? How to Choose Between a PLLC, PC, or LLC

PLLC, PC, or LLC? Your side gig's success hinges on the structure you choose. Get the clarity you need—before you file.

I receive a question about business entities nearly every week from well-intentioned doctors eager to establish a corporate structure for their side ventures. They often ask,

"Which business entity is best suited for my needs: a Professional Limited Liability Company (PLLC), a Limited Liability Company (LLC), or a Professional Corporation (PC)?"

These options can indeed appear confusing, as they each offer distinct advantages and cater to different professional needs. It’s important to understand that while all these entities provide certain benefits, such as limited liability protection, they are not the same and can differ significantly in terms of legal and tax implications.

A PLLC is specifically designed for licensed professionals like doctors, lawyers, and accountants. This entity allows you to form a company that offers personal liability protection without infringing on your professional standards or licenses.

An LLC is more versatile and can be used by any individual or group who wants to protect personal assets while enjoying flexible management options. It this best suited for a medical office building or investment real estate or non-medical side businesses. It cannot be used for your professional services business.

A PC, on the other hand, is similar in its focus on licensed professionals but operates more like a traditional corporation with potential tax benefits.

My pro tip would be to steer clear of operating as a sole proprietorship due to its lack of asset protection. Unlike the aforementioned entities, sole proprietorships do not separate personal assets from business liabilities—meaning your personal property could be at risk if the business encounters financial difficulties or legal claims.

Therefore, selecting an appropriate entity such as PLLC or PC for those in licensed professions can provide essential safeguards against potential risks while enabling efficient management of your side business aspirations.

To Answer the Question on Business Entity

Yes, it does matter whether a you form a PLLC, LLC, or PC for your side job, and the right choice depends on several legal, professional, and state-specific considerations.

Let’s walk through the key differences and what they mean for you as a physician entrepreneur forming a micro-corporation for side job professional work (e.g., locums, telehealth, consulting, medical expert work, etc.).

If you want to go deeper check out our free PEA resource: 

Starting a Single Member Micro-Corporation in Medicine: A Physician's Guide

🔍 First, What Do These Acronyms Mean?

• LLC = Limited Liability Company

• PLLC = Professional Limited Liability Company

• PC = Professional Corporation (or sometimes PSC – Professional Service Corporation)

Each is a type of business entity offering limited liability protection, but they're designed for different contexts—especially when professional licensing is involved.

⚖️ Why the Difference Matters for Physicians

You are a licensed professional, and most states require that licensed professionals cannot form a regular LLC or corporation for providing professional services like practicing medicine. Instead, you must form an entity that complies with your state's licensing rules.

✅ PLLC vs. LLC

• A PLLC is specifically designed for professionals (doctors, lawyers, CPAs, etc.).

• Many states do not allow doctors to use a plain LLC if they're providing professional services.

• If you form a regular LLC and practice medicine or do anything requiring a license, your LLC might not be legally recognized or could be invalid.

✅ PC vs. PLLC

• A PC (Professional Corporation) is the corporate (C-corp or S-corp) equivalent of a PLLC.

• Some states require physicians to form a PC, not a PLLC (e.g., California).

• Other states allow both PLLCs and PCs and leave it up to you which to choose.

• To check your state requirements, go to my PEA Reference Guide on Professional Business Entities for each state.

💡 Tip: Many state medical licensing boards require approval before you can file your PLLC or PC formation documents with the Secretary of State. Make sure to check with agency who is filing this business entity for you.

🧠 Decision Tree for a Doctor Forming a Side-Gig Corporation

Here’s how to think it through:

1. Are you offering professional medical services (e.g., telemedicine, locums, collaborating with NPs, acting as an independent medical contractor)?

   • ✅ Yes → You likely need a PLLC or PC, not a general LLC.

   • ❌ No (e.g., coaching, consulting, speaking) → A general LLC or S-Corp might suffice.

2. Does your state allow physicians to form PLLCs or PCs?

   • Check with:

     • Your state’s Secretary of State

     • Your state Medical Licensing Board

     • Your business attorney (or use a legal formation service familiar with your state)

     • Your CPA who will help you with choosing the tax classification for your business

3. Are you the only owner?

   • If yes, you can usually form a single-member PLLC or PC.

   • If you’re collaborating with other physicians, some states require all owners to be licensed.

🧾 Tax Considerations

• Whether you form a PLLC or PC, you can usually elect to be taxed as an S-Corp to save on self-employment taxes.

• The S-Corp election is a tax election, not a business structure. It’s made with the IRS, not your state. Again, your CPA will help you with this process. Most of the time, and S-Corporation tax classification will be your best option.

✅ Recommendation for Most Doctor Side-Gigs

For most doctors starting a micro-corporation to handle locums, telehealth, 1099 work, or medical collaborations, the best route is:

Form a PLLC or PC (whichever is permitted in your state), and elect S-Corp taxation with the IRS once you're profitable enough to justify it (typically over ~$40,000 in net income).

You can read more about this in my Case Study: How To Pay No Taxes On Your Side Job Income

💼 Pro Tips from PEA-SimpliMD

If you sure about your next step after reading this post, and you want to get started fast, head over to LegalZoom to form a basic corporate structure to get your business started.

If you're unsure, I recommend:

1. Checking with your state medical board or Secretary of State.

2. Looking over my PEA Quick Reference Guide for Professional Corporations in each state

3. Going to my a resource I’ve created as a handy guide to help you with your micro-corporation formation, it’s called: 5 Business Formation Legal Service Options for Professional Micro-Corporations.

4. Consulting with a CPA who understands professional corporations and S-Corp optimization for doctors.

A quick and personalized approach is to allow me to connect you to our vetted legal and tax professionals through PEA-SimpliMD’s Business Formation Guide services .

This $500 service will help you build the professional relationships necessary to form and operate your business. It also provides you with a PEA Explorer Membership and a host of other business resources!

Your PEA Explorer Membership includes multiple side job resources as a bonus. You can check out our three PEA membership levels and features here.