Don't Be a D/B/A - A Litigator's Warning to the Unincorporated Health Care Practitioner

August 22, 2005

AJB

What is as foolish as a person who has emphysema and smokes or a person who rides in a car without a seat belt? Give up? Some of you are doing it right now; OPERATING A BUSINESS AS A D/B/A. What is even more foolish then operating a business as a D/B/A?

Operating a business as a D/B/A while owning real estate. Even for the, "I'll never be sued group", unforeseen events can place you looking down the barrel of a lawsuit. These events can range from another person or entity defaulting on an obligation to you, an honest mistake on your part in fulfilling your obligations to another party, or even serious illness. Should you find yourself in this situation, having a proper business entity is extremely important.

Ask any litigator the first three questions they ask prior to filing suit and you will get the same response...

  • Who is the claim against?
  • Is there insurance to cover the claim?
  • How am I going to collect on any future Judgment I may receive?

If you are doing business as a D/B/A, the claim will be against you personally. If you are doing business as a corporate entity, under most circumstances, the claim would be against the corporation, placing your personal holdings outside of what can be looked to for satisfaction of a Judgment.

Of course the nature of a person's business is a key factor in determining the value the business will gain from incorporating. Some businesses are simply more prone to generating litigation then others. Some typical high-risk fields are construction and related service industries, businesses that buy inventory or supplies on credit, and business that carry a substantial amount of unsecured debt on their books.

One oftentimes-overlooked susceptible industry is health care...read more here

You may read more at the link below.

by: Adam J. Basch, Esq.

Healthcare News
August 2005

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