Should I Start an LLC for My Walk-in Clinic?

Starting a limited liability company (LLC) for your walk-in clinic can provide several benefits.

Most importantly, an LLC structure offers limited liability to its owners, which can protect their personal assets from lawsuits and creditors.

For a walk-in clinic, lawsuits can arise from things like the wrongful diagnosis of a patient’s condition, prescription drug errors, and discrimination.

LLCs are also affordable, highly flexible (from a tax point-of-view), and can make your walk-in clinic seem more credible.

Recommended: Use Northwest to form an LLC for $29 (plus state fees).

Do I Need an LLC for a Walk-In Clinic?

LLCs are a simple and inexpensive way to protect your personal assets and save money on taxes.

You should form an LLC when there's any risk involved in your business and/or when your business could benefit from tax options and increased credibility.

LLC Benefits for a Walk-In Clinic

By starting an LLC for your walk-in clinic, you can:

Protect your savings, car, and house with limited liability protection
Have more tax benefits and options
Increase your business’s credibility

Limited Liability Protection

LLCs provide limited liability protection. This means your personal assets (e.g., car, house, bank account) are protected in the event your business is sued or if it defaults on a debt.

Walk-in clinics will benefit from liability protection because medical establishments, including walk-in clinics, face the risk of medical malpractice and personal injury liability.

Example 1: A patient walks into your clinic. You ask about her symptoms, check her vitals, and give her a prescription. Two days later, she returns with more severe symptoms and sues you for a wrongful diagnosis. Limited liability would protect your personal assets from being put on the line.

Example 2: You prescribe some medication for one of your patients. While filling out the prescription, the pharmacist points out that two drugs would act contrary to each other in her body. If the patient goes on to sue you for a prescription drug error, the lawsuit will only affect your LLC’s assets.

Example 3: You receive a court summons at your clinic as a result of a woman claiming that she came into your clinic three days in a row and was not given treatment, despite repeated appeals. With an LLC structure in place, your personal assets will remain safe from any fines that may be imposed by a court.

An LLC will also protect your personal assets in the event of commercial bankruptcy or loan default.

To maintain your LLC's limited liability protection, you must maintain your LLC's corporate veil.

LLC Tax Benefits and Options for a Walk-In Clinic

LLCs, by default, are taxed as a pass-through entity, just like a sole proprietorship or partnership. This means that the business's net income passes through to the owner's individual tax return.

The business’s net income is then subject to income taxes (based on the owner's tax bracket) and self-employment taxes.

Sole proprietorships and partnerships are taxed in a similar way to LLCs, but they do not offer limited liability protection or other tax options.

S Corp Option for LLCs

An S corporation (S corp) is an IRS tax status that an LLC can elect. S corp status allows business owners to be treated as employees of the business (for tax purposes).

S corp tax status can reduce self-employment taxes and will allow business owners to contribute pre-tax dollars to 401k or health insurance premiums.

The S corp status requires that the business pay the employee-owner(s) a reasonable salary for the work they perform.

In addition, the business might need to spend more on accounting, bookkeeping, and payroll services. To offset these costs, you'd need to be saving about $2,000 a year on taxes.

We estimate that if a walk-in clinic owner can pay themselves a reasonable salary and at least $10,000 in distributions each year, they could benefit from S corp status.

You can start an S corp when you form your LLC. Our How to Start an S Corp guide will lead you through the process.

Credibility and Consumer Trust

Walk-in clinics rely on consumer trust. Credibility plays a key role in creating and maintaining any business.

Businesses gain consumer trust simply by forming an LLC.

A growing business can also benefit from the credibility of an LLC when applying for small business loans, grants, and credit.

Northwest will start an LLC for you for just $29 (plus state fees).

Get Started

How to Form an LLC

Forming an LLC is easy. There are two options for forming your LLC:

You can hire a professional LLC formation service to set up your LLC for a small fee
Or, you can choose your state from the list below to start an LLC yourself

Select Your State

For most new business owners, the best state to form an LLC in is the state where you live and where you plan to conduct your business.

Do LLCs Need Insurance?

All businesses need insurance to protect their business assets — even LLCs. This is because the limited liability protection from an LLC protects your personal assets, not your business assets.

Walk-in clinics need business insurance to deal with lawsuits arising from cases like misdiagnosis, failure to treat, and prescription drug errors.

Common Situations Business Insurance May Cover for a Walk-In Clinic

Example 1: When one of your customers enters your clinic, they slip on slush and ice that was tracked in by a previous customer. General liability insurance would cover the costs of their injuries from the fall.

Example 2: When unloading new equipment for your walk-in clinic in the parking lot, a staff member damages one of your customer’s cars. General liability insurance would cover the costs to fix the vehicle.

Example 3: One of your customers believes they were unfairly treated by your staff due to their ethnicity. General liability insurance would pay for the costs associated with protecting your reputation.

Other Types of Coverage Walk-In Clinics Need

While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some other types of insurance all walk-in clinics should obtain:

Commercial Property Insurance

If you own the space used for your walk-in clinic, you’ll need commercial property insurance to keep your grounds and equipment safe. This insurance typically covers your clinic from severe storms, theft or vandalism, and fire. From broken windows to water-damaged equipment, this insurance can compensate you for a variety of expenses.

Malpractice Insurance

Walk-in clinics are at risk of malpractice lawsuits in the same way that larger hospitals are. Malpractice covers expenses associated with mistakes made when assessing, advising, or treating a patient.

Workers’ Compensation Insurance

Workers’ compensation is necessary for all employees, whether they work full-time or part-time. Clinics can be dangerous places to work due to the risk of cross-contamination. Workers’ compensation insurance can cover sudden illnesses or accidents, as well as chronic injuries that stem from repetitive motion on the job (e.g., lifting boxes, sitting for long periods).

Business Interruption Insurance

If your walk-in clinic needs to close due to a covered event, such as a major storm or vandalism, business interruption insurance provides income to owners even when they can’t see patients.

Data Breach Insurance

Medical and insurance fraud is on the rise, so data breach insurance is critical for a walk-in clinic in case a hacker violates patient data in any way. This insurance will help cover the costs associated with identity or insurance theft.

Commercial Umbrella Liability Insurance

This insurance is available for medical practices in case a general liability policy reaches its maximum limits. When it comes to a healthcare business, lawsuits can become extremely expensive very quickly. A general liability policy may only cover a portion of the expenses (based on its policy limits), but commercial umbrella insurance can cover additional expenses above and beyond those limits.

Should I Start an LLC FAQ

Choosing the right business structure depends on your business’s unique circumstances and needs. However, unless your business is very low risk (like a hobby), an LLC is likely the better option.

Visit our LLC vs. Sole Proprietorship guide to learn more.

At a minimum, you’ll need general liability insurance, workers’ compensation insurance, and commercial property insurance.

Read our Walk-In Clinic Business Insurance article for more info.

You will need to budget the sum of $750,000 to $1 million to set up a walk-in clinic. This will cover the cost of purchasing or leasing a facility space, outfitting, furniture, and fixtures.

You will also need to purchase business insurance, clinic equipment, and software.

Visit our How to Start a Walk-In Clinic guide to learn more about the costs of starting and maintaining this business.

A walk-in clinic faces a number of regular operating expenses, including payroll, taxes, EMR software, radiology and lab fees, insurance, professional fees, maintenance and cleaning, and write-offs for nonpayment.

Learn more about running a walk-in clinic.

A walk-in clinic makes money by charging patients for medical services (e.g., exams, x-rays, etc.).

Learn more about starting a walk-in clinic.

Walk-in clinics, also called urgent care centers, provide medical treatment for non-life-threatening illnesses and injuries. They can be faster and more convenient than scheduling an appointment with one’s regular doctor.

Profits for a walk-in clinic depend on how many patients the clinic sees per day, how much it charges per patient, and its overhead costs.

Learn more about starting a walk-in clinic.