An LLC for a nurse practitioner (NP) provides several benefits, but the unique nature of the profession means there are limitations to the liability protection. For example, professionals cannot rid themselves of liability arising from malpractice. Insurance is required for this liability.
However, there are many aspects of your business and personal life that can be structured so as to minimize your assets at risk. This structuring can provide more protections than most practitioners are aware of.
Nurse Practitioners are confronted by two major sources of liability: Business Liability and Personal Liability.
Business Liability: Nurse Practitioners who use their knowledge and experience to establish operating businesses, from Aesthetics to Weight Loss and everything in between, are likely to be confronted with a lawsuit at some point in time. Maintaining adequate insurance is the first line of defense against these lawsuits, but business structure, particularly the use of a holding company, can create an almost impenetrable wall around your business and personal assets.
A typical holding company structure for an operating business will have four parts:
- The holding company itself, formed in a state with very strong asset protection laws, such as Wyoming. The holding company does nothing more than own other companies: it does not have liability of its own.
- An operating company which actually serves the clients, formed in the state where the business is located.
- An asset owning company, which owns expensive equipment that it rents to the operating company.
- A financing company, which can provide loans to the operating company or the asset owning company.
With this structure, lawsuits against the operating company, which has no assets and only debt, will be limited to insurance policy limits. Your business assets will be protected from judgment creditors. An aggressive creditor who tries to “pierce the corporate veil” and get to your personal assets will be prevented from doing so by the holding company and the strong asset protection laws of Wyoming.
Personal Liability: Like many professionals, when a Nurse Practitioner gets sued, they are sued as an individual and their LLC or Corporation is unlikely to shield them from personal liability. Hopefully, the Nurse Practitioner's malpractice insurance is enough to settle the claim, but if it is not, the Nurse Practitioner's personal assets will be at risk. Unfortunately, many Nurse Practitioners have not adopted the same asset protection strategies that doctors and other professionals use.
One of the most important things you can do is shield your accumulated wealth from prying eyes in an anonymously formed Wyoming LLC so that the person suing does not know how wealthy you are. If an attorney knows you own multiple businesses and a real estate portfolio, they will also know you have more to lose and will push for a bigger settlement. Denying them information about your wealth gives you a tremendous advantage. Another advantage of a Wyoming LLC is "charging order protection". This means that even if a plaintiff gets a judgment against you personally, they cannot take the assets in your LLC to satisfy their claims. Few states offer this and all the assets your Wyoming LLC owns, including other LLCs, will be protected by your Wyoming LLC's charging order protection.
Everyone who is serious about protecting their wealth should start with an anonymous Wyoming LLC formed by a company that is focused on privacy and asset protection, as we are.
In short, LLCs for nurse practitioners have limitations for professional liability, and thus we recommend additional entities and trusts as enumerated above. If you desire to discuss a potential asset protection strategy, please call us today.
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Form a Wyoming llc
Wyoming was the first to allow limited liability companies in the United States. It continues leading the country and world to this day. Anonymity, charging order protection and single member LLC protections are just some of the reasons people do business in Wyoming.
Wyoming increasingly competes with traditional offshore providers. Self-settled trusts, private trust companies and more are achievable using a Wyoming situs.
WYOMING VIRTUAL OFFICE
Virtual offices solve a variety of problems. Whether you need a reliable phone, mail handling or a nexus - all three will find an office useful
FORM A WYOMING CORPORATION
Wyoming has no corporate income tax, does not disclose officers or shareholders and does not charge spurious fees (unlike Nevada). These benefits have led Wyoming to become the incorporation leader in the US.
WYOMING REGISTERED AGENT
Every company must maintain a registered agent. For anonymous companies, the agent serves as the public face of the company. We personally act as the agent for only $59 per year.
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