Starting Your Private Practice in Ohio: A Legal Guide for Healthcare Professionals
Introduction: Why Legal Planning Is Critical for Your New Practice
Starting your own private practice is a major milestone. Whether you’re a physician, nurse practitioner, a dentist, or another type of healthcare professional, launching a practice in Ohio means shifting from a worker to a business owner — and from an employee to an employer. This comes with responsibilities and risks you may not have faced before: choosing the right business entity, hiring or contracting team members, signing real estate agreements, and navigating liability concerns.
This guide walks you through the legal essentials so your practice opens on solid footing and positions for success.
What Legal Structure Should You Choose for Your Private Practice?
Choosing the right legal entity sets the foundation for how your practice will be taxed, how the business will operate day-to-day, and how you approach liability protection in the workplace.
LLC (Limited Liability Company):
An LLC is often the best choice for solo or small-group practices. It’s flexible, limits personal liability, and allows profits to pass through to members’ individual tax returns. For practices with more than one owner (e.g., a husband-wife team or partners), a multi-member LLC with a detailed operating agreement is key.
Professional Corporation (PC or S-Corp):
Ohio allows licensed professionals to form professional corporations. These offer limited liability but have stricter compliance requirements and can be less flexible in how profits are distributed.
Tip: If you’re the sole owner, a single-member LLC is simple and protects you legally. If you’re partnering with another provider, an LLC with a comprehensive operating agreement is critical to prevent misunderstandings down the road.
How Should Ownership and Compensation Be Structured?
If you’re starting a group practice or going into business with a spouse or colleague, be sure to clarify:
- Ownership percentages
- Profit distribution mechanics
- Decision-making power
- Buy-in and buy-out rights
- Exit strategies
These topics should all be addressed in your operating agreement or corporate bylaws. Even if you trust your partner implicitly, disputes can arise later, especially under financial or legal pressure.
What Should You Consider When Choosing Office Space?
Your office is more than just a location, it’s an important compliance tool — or a liability if it’s not selected and build out correctly. Ohio healthcare practices must consider:
- Zoning compliance (medical use may not be allowed in some commercial spaces)
- Lease terms (avoid personal guarantees where possible)
- ADA compliance and accessibility
- Buildout and equipment installation rights
Whether leasing or buying commercial space, get your agreement reviewed. Common pitfalls include vague maintenance clauses, unexpected CAM (common area maintenance) fees, or restrictions on signage and hours of operation.
Tip: If your business has sufficient assets and credit history, try to avoid a personal guarantee on the lease or bank loan.
Employee vs. Contractor: Who Will You Hire and How?
One of the most important early decisions is how you’ll staff your practice. Will you hire:
- Employees (W-2s, covered by employment law)?
- Independent Contractors (1099s, no tax withholding)?
Misclassification can lead to audits and penalties. Ohio and federal agencies look at behavioral and financial control, relationship permanence, and the nature of the work.
Best practice: Use clearly written employment or contractor agreements tailored to healthcare roles. These should address:
- Payment and benefits
- Termination rights
- Non-compete and confidentiality clauses
- Scope of duties and reporting structures
What Types of Contracts and Agreements Will You Need?
Launching a practice requires more than just forming an LLC. You’ll need:
- Operating Agreement or Bylaws: Defines how your business runs and how high-level decisions are made.
- Employment/Contractor Agreements: Protects you from liability, defines worker expectations.
- Office Lease or Purchase Agreement: Secures the space your practice will grow in, ideally on terms favorable to healthcare-based small businesses.
- Patient Consent and Waivers: Minimize liability for treatments, procedures, or billing.
- Vendor and Referral Agreements: Formalize business relationships and ensure access to materials, inventory, and equipment as needed.
What Are the Most Common Legal Risks for New Practices?
Starting fresh doesn’t mean you’re immune to legal risk. Common exposures include:
- Contract disputes with landlords, contractors, or vendors
- Regulatory issues (e.g., missing business licenses, zoning issues)
- Patient claims tied to treatment outcomes or informed consent
- Partnership disagreements without clear procedures or dispute resolution mechanics
- Employment disputes over classification or wrongful termination
Early legal planning prevents these issues or mitigates their fallout.
Do You Need a Business Attorney to Launch a Private Practice?
Yes, it’s highly recommended in a regulated industry like healthcare. While you don’t need a lawyer for every small decision, there are key points where legal help is essential:
- Drafting or reviewing contracts (operating documents, leases, employment agreements, vendor deals)
- Forming your LLC or corporation properly
- Clarifying liability issues
- Resolving ownership or partner structuring questions
Final Thoughts: Start Strong, Stay Compliant
Opening your private practice is both exciting and overwhelming. Legal mistakes at the outset can lead to costly corrections down the road, especially if your practice grows quickly. Investing in the right legal foundation is one of the smartest moves you can make.
If you’re a first-time Ohio healthcare provider launching a practice, Daniel Ross & Associates can help you:
- Choose the right legal entity
- Draft the contracts you’ll rely on every day
- Review or negotiate your lease or real estate purchase
- Set your practice up for long-term compliance and protection
Schedule a consultation today and let’s build your private practice the right way.
