Owning a veterinary practice can be a rewarding experience for individuals who wish to establish their own work culture, develop a team of compassionate professionals, and choose the clients they work with. Establishing, managing, and growing a practice is incredibly complicated, both legally and financially, leading many entrepreneurs to seek outside legal counsel. At NC Planning, we work closely with the owners of veterinary practices to offer tailored solutions and strategies, working closely with our clients whether they own one practice or multiple. We aim to help you achieve your long-term goals, whether that means an acquisition, succession planning or planning to sell your practice. To learn more, consider contacting our North Carolina veterinary practice attorneys at our Raleigh office at (919) 568-3681 or our Cary office at (919) 900-4720 today.
Establishing a veterinary practice is an exciting business endeavor, representing a major step forward in every practice owner’s career and life. When forming a new veterinary start-up, there are legal issues that must be accounted for in order to ensure the success of your practice long-term. These issues include:
- Selecting a business structure for your practice.
- Choosing the proper tax structure for your business.
- Crafting employment, operating and/or partnership agreements.
- Ensuring regulatory compliance.
- Investing in technology and necessary equipment.
- Developing a plan for the management and operation of your practice.
It should be noted that according to Chapter 55B of the Professional Corporation Act, a person who wishes to form a veterinary practice must be licensed in the state of North Carolina. Owning and managing a veterinary practice requires a broad skill set and strong business acumen, leading many veterinarians to seek guidance from our team of North Carolina veterinary practice attorneys.
Buying or Selling a Veterinary Practice
For many, buying or selling a veterinary practice is a new experience. It can have major implications for your financial portfolio and, for some, is one of the largest investments they will make in their career. For this reason, it is important to enter this transaction with a foundational understanding of what is expected of you and how the deal should transpire. Whether you are buying or selling a veterinary practice, the following are issues that will likely come to the forefront during the process:
- Addressing tax liability and obligations.
- Identifying and compiling all relevant business records, including partnership or operating agreements, articles of incorporation, licenses, and registrations.
- Performing a business valuation for the practice.
- Protecting and/or transferring intellectual property.
- Searching for remaining liens or outstanding debts.
- Considering how current employees will be managed during the transfer of ownership.
Veterinarians often experience unique challenges related to asset protection, largely due to issues of liability surrounding malpractice. It is critical to account for asset protection when forming and maintaining your practice. There are myriad legal strategies available to mitigate risk and protect your practices assets, including by not limited to organizaitonal structure. At NC Planning, our team of North Carolina veterinary practice attorneys advise creating a comprehensive risk management plan to protect your assets and shield your practice from potential creditors.
With a foundational understanding of tax obligations and best practices, it is possible to reduce the amount of your tax bill and increase your practice’s profits. To fully leverage tax benefits for your practice, advance planning is often necessary. The following planning strategies may be useful to reducing your tax liabilities:
- Deferring major purchases. 26 USC 179 provides tax deductions for business purchases of certain depreciating assets. Timing these purchases strategically can allow you to optimize revenue and reduce the amount you pay in taxes.
- Utilizing the Qualified Business Income Deduction. This federal incentive provides deductions of up to 20% for qualified income. An NC Planning attorney can provide further detail regarding eligibility requirements for this program.
- Leveraging benefits. Establishing fringe benefits for both you and your employees is a smart way to mitigate the burden of taxes on your practice. Retirement plans and insurance benefits are typically tax-deferred and contributions can be deducted on your yearly taxes.
Establishing a veterinary practice can quickly become a successful and lucrative business endeavor. A key aspect of maintaining the success and longevity of your practice is planning for the succession of leadership in the event of the exit, retirement, or unexpected departure of a key leader in the company. Succession planning encompasses all the legal strategies employed by North Carolina veterinary practice attorneys to plan for these events. An effective succession plan will identify critical roles in your practice, pinpoint potential individuals to fill unexpected vacancies of those roles, and provide for the training for employees to assume leadership if necessary.
How to Choose the Right Veterinary Practice Attorney for Your Practice
The legal counsel you choose to guide and advise you in all aspects of your business will have a significant impact on the success of your practice. During your initial consultation with your attorney, consider the following questions:
- Do you have experience working with veterinarians in North Carolina?
- What are the potential pitfalls you see in my current strategies?
- What is your fee structure?
- How will you communicate with me moving forward?
- What next steps should I take to ensure my practice’s success?
NC Planning Will Help You Plan for the Road Ahead
Establishing a veterinary practice can be a fruitful and rewarding business venture. Whether you are in the process of forming your practice or are looking to expand your business and reach new markets, our team of experienced North Carolina veterinary practice attorneys can provide legal guidance to help you achieve your goals. To begin the process of planning for the formation, management, or succession of your practice, consider contacting either our Raleigh office at (919) 568-3681 or our Cary office at (919) 900-4720 today, or scheduling a consultation with us online.