It depends on the laws of the state where you intend for your practice entity to operate. In some states, veterinary practices can only be owned either (i) directly, through sole proprietorships or general partnerships of veterinarians licensed in that state, or (ii) through a professional entity, such as a professional corporation (PC), professional limited liability company (PLLC) or professional association (PA), that is owned entirely by veterinarians licensed in that state.
Other states permit non-veterinarians to own veterinary practices, and a professional entity usually would not be appropriate in those instances. More specifically, non-veterinarians typically are not permitted to own equity interests in a professional entity formed to provide veterinary services. So, any practice entity that will have non-veterinarian ownership will almost always need to be formed as a general purpose business entity, such as a corporation or LLC, if permitted under the applicable state’s laws, rather than as a professional entity.
In those states that allow non-veterinary ownership and the use of general business entities to own veterinary practices, many veterinarians elect to use a corporation or LLC to own the practice, rather than a professional entity, since a general business entity provides added flexibility to have non-veterinary owners, if desired.
Since the entity formation question involves both legal and tax considerations, we strongly recommend that anyone trying to decide which ownership structure works best for them consult with both an attorney and an accountant who are well-versed in the applicable state’s rules and tax considerations.