State guide · Pennsylvania
Starting a Medical Practice in Pennsylvania
What physicians need to know about Pennsylvania's regulatory environment, entity requirements, and practice-specific rules.
Entity required
Professional Corporation (PC) or Restricted Professional LLC (PLLC)
LLC permitted
No
CPOM enforcement
Moderate
Top income tax
3.07%
Min. franchise tax
None (capital stock tax fully phased out)
Med board registration
Not required
The information on this page is provided for general reference only and may not reflect recent regulatory or legislative changes. Entity formation requirements, tax rates, and CPOM rules vary by state and change frequently. Always verify requirements with your state's official agencies, a qualified healthcare attorney, or a CPA with medical practice experience before making business formation decisions. Nothing on this page constitutes legal or financial advice.
Entity Requirements
Pennsylvania physicians may form a Professional Corporation under 15 Pa.C.S. Chapter 29 or a Restricted Professional Company (the PA equivalent of a PLLC) under 15 Pa.C.S. Chapter 89 Subchapter L. All shareholders or members must be licensed Pennsylvania physicians.
Filing is with the Pennsylvania Department of State, Bureau of Corporations and Charitable Organizations.
- •Form a Professional Corporation (PC) or Restricted Professional Company (RPC/PLLC)
- •All shareholders/members must be licensed PA physicians
- •File Articles of Incorporation (PC) or Certificate of Organization (RPC) with PA Department of State
- •Entity name must include "PC," "Professional Corporation," "PLLC," or "Restricted Professional Company"
- •File a Decennial Report every 10 years (years ending in 1)
Corporate Practice of Medicine
Pennsylvania has a moderate Corporate Practice of Medicine doctrine. The Medical Practice Act of 1985 governs physician practice and there are limits on lay ownership, though enforcement is less aggressive than in CA, NY, or TX. Hospitals can employ physicians, and many MSO arrangements are accepted.
Fee-splitting is prohibited under the Medical Practice Act. MSO fees should be fair-market-value administrative fees, not percentages of clinical revenue.
Tax Considerations
Pennsylvania imposes a flat 3.07% personal income tax — one of the lowest among states with an income tax. There is no Pennsylvania franchise tax (the capital stock/franchise tax was fully phased out in 2016). The PA corporate net income tax (CNIT) for C-corps is being phased down (8.49% in 2024, eventually 4.99% by 2031 — Verify current rate).
Philadelphia and other localities impose Business Income & Receipts Tax (BIRT) and earned income taxes that significantly affect physician practices.
- •Flat 3.07% personal income tax
- •No franchise tax (capital stock/franchise tax fully phased out)
- •PA Corporate Net Income Tax phasing down — Verify current rate (was 8.49% in 2024)
- •Philadelphia BIRT and Net Profits Tax apply to Philadelphia-based practices
- •Local Earned Income Taxes (typically 1%) imposed by most municipalities and school districts
Pennsylvania State Board of Medicine
Pennsylvania does not require general entity registration with the State Board of Medicine for most physician practices. The board licenses individual physicians; the entity is a Department of State registration.
- •No separate entity registration with the State Board of Medicine required for most practices
- •All practicing physicians must hold an active PA medical license
- •Certain facility types (ambulatory surgical facilities, etc.) require separate Department of Health licensure
Employment Law Considerations
Pennsylvania is generally moderate on employment-law complexity. There is no state-mandated paid sick leave (Pittsburgh and Philadelphia have local ordinances). Non-compete agreements are enforceable if reasonable, but Pennsylvania courts disfavor physician non-competes that limit access to care.
- •No statewide paid sick leave (Pittsburgh and Philadelphia have local ordinances)
- •Pennsylvania minimum wage at federal $7.25/hour
- •Non-competes generally enforceable but courts scrutinize physician non-competes for impact on patient care
- •Philadelphia Wage Theft Ordinance requires written notice of pay terms
- •PA Workers' Compensation registration required for any employees
Official resources
Bookmark these official agency portals for Pennsylvania entity formation, tax registration, and medical board information.
Looking for Pennsylvania licensing and credentialing information?
State medical license requirements, controlled-substance registration, and Medicaid enrollment specifics for Pennsylvania.
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