Health check on the structure of your medical practice

BDO Healthcare – Financial Health Series Part 4

The structure that works for you, may not necessarily be what works for someone else.

If you want to set up a medical practice, one of your first conversations should be with a BDO Healthcare specialist to discuss the right structure for you. Similarly, if you’ve been in practice for a while, your structure shouldn’t be something you ‘set and forget’ but rather a regular part of your corporate health check to ascertain whether commercially that structure can still service your business appropriately.

Pro Tip: Structuring as a strategic long-term investment

Spending some time and money initially to get expert structuring advice for your specific circumstances can save a lot of heartache later, as changing structure can be a costly and disruptive exercise.

Business structure considerations

Company, trust, partnership, sole trader, what do these entity types actually mean? Understanding the pros and cons of each is an important first step, and your specific circumstances could influence the appropriate structure.

When discussing your business structure, it’s essential that careful consideration is also given to both the short, medium and long-term plans for the business. For example:

Am I looking to practice as a sole practitioner or am I looking to expand and bring on additional owners at a later point in time? What type of structure can facilitate that?
What structure fits with the commercial realities of the practice?
What structure fits with best practice and compliance with other regulatory bodies? For example, your relevant state revenue office.
Is my structure conducive to an exit strategy?

Structuring should also contemplate how your personal circumstances inter-relate with your business affairs. This could extend to considerations for overall wealth creation, income taxes, and state-based taxes such as stamp duty or payroll tax.

It is easy to get caught up in watercooler talk around how someone else has structured their tax affairs however that may not necessarily be suitable for you.

Practical considerations

There are also further practical considerations to keep front of mind when setting up a new business structure. For example:

Have I covered off on the appropriate ATO registrations?
Have I chosen an appropriate accounting software?
Have I ensured that you’re set up and linked for Single Touch Payroll (STP) reporting?
Have I spoken with my lawyer to ensure any agreements in place are appropriate and have been regularly reviewed?
Have I considered whether a business name should be registered?

Next Steps

Please reach out to our team of Healthcare specialists if you wish to discuss the above.

View the below insights to find out more about our Financial Health series.