If you're running a medical practice in Maryland, you'll navigate two separate regulatory systems simultaneously: business entity compliance through the State Department of Assessments and Taxation (SDAT) and physician licensing through the Board of Physicians. This dual oversight creates unique coordination challenges, and Maryland doesn't give you any margin for error.
Here's what makes Maryland especially unforgiving: miss the April 15 annual report deadline (or fail to request the 60-day extension to June 16), and you'll lose good standing status. Your physicians face the same rigid standard—if they don't renew by September 30, they lose all practice authority instantly. This can shut down your entire operation overnight if you're not tracking these deadlines carefully.
Maryland recognizes three distinct professional entity types for healthcare organizations: Professional Corporations (PCs) under Maryland Corporations and Associations Article, Title 5, Subtitle 1, Professional Associations (PAs) as naming designations under §1-502, and Limited Liability Partnerships (LLPs) governed by Title 9A, Subtitle 10. Here's what you need to know: Maryland doesn't recognize Professional Limited Liability Companies (PLLCs) as a distinct entity type for healthcare professionals—a critical distinction that affects your formation strategy.
Most Maryland physician practices organize as Professional Corporations. §5-101 of the Maryland Code defines "professional service" as services lawfully rendered only by licensed persons, explicitly including physicians, dentists, psychologists, and other licensed healthcare practitioners.
Your PC's ownership structure is strictly limited. Under §5-101, you can only issue stock to "qualified persons"—licensed individuals authorized to render the professional service, other professional corporations, or general partnerships eligible under the Act. For medical practices, this means only licensed physicians can own your PC.
Here's a deal-breaker for many practices: your PC can only provide one type of professional service. Maryland law prohibits multi-disciplinary professional corporations. Want to combine physicians with nurse practitioners or physician assistants under one entity? You can't use a PC structure—regulatory interpretation of the Corporate Practice of Medicine doctrine blocks this arrangement.
§5-121 establishes your liability framework. You remain personally liable for your own negligent acts but aren't liable for other professionals' negligence unless you were negligent in supervision. This partial liability shield distinguishes PCs from general partnerships while maintaining accountability for individual professional conduct.
Professional Association designation represents an authorized naming alternative rather than a separate entity type. §1-502 lets you use "Professional Association" or "PA" in your legal name. PA entities follow identical formation requirements, ownership restrictions, governance provisions, and compliance obligations as Professional Corporations.
Title 9A, Subtitle 10 governs Limited Liability Partnerships in Maryland. LLPs provide an alternative structure if you're organizing your healthcare practice as a partnership rather than a corporation.
§9A-103 establishes mandatory fiduciary duties that your partnership agreements can't eliminate: the duty of loyalty, the duty of care, and the obligation of good faith and fair dealing. These statutory protections ensure partners maintain professional standards regardless of contractual arrangements.
Maryland doesn't recognize Professional Limited Liability Companies (PLLCs) as a distinct entity type for healthcare professionals. The SDAT List of Entities for 2026 confirms this limitation. If you're considering LLC structures, you'll need to carefully evaluate Corporate Practice of Medicine compliance—standard LLCs create enforcement risks for physician practices.
Maryland definitively enforces a Corporate Practice of Medicine doctrine through multiple legal mechanisms. §14-303(a) of the Health Occupations Article prohibits corporations, associations, partnerships, or other business entities from practicing medicine or employing physicians to provide professional medical services. The licensing requirement under §14-301 mandates individual Board licensure to practice medicine in Maryland.
Tormarco Harris v. State of Maryland confirmed that Maryland follows the common-law corporate practice of medicine doctrine prohibiting corporate ownership of medical practices. Hospitals and Health Maintenance Organizations can employ physicians under §19-704 of the Health-General Code. Management Services Organizations may provide non-clinical administrative services like billing and scheduling, but they can't employ physicians or control clinical decision-making.
To form your healthcare entity in Maryland, you'll coordinate between SDAT for business registration and the Maryland Board of Physicians for professional approval. SDAT handles the business side with filing fees ranging from $100-$120, processing times of 4-6 weeks for PCs and 6-8 weeks for LLPs. You'll need a registered agent who's either a Maryland resident over 18 with a physical street address, or a Maryland corporation/LLC authorized to act as agent—your entity can't serve as its own agent.
Here's a significant information gap you need to know about: the Board's website doesn't provide public information about professional entity formation approval requirements, fees, forms, or processing timelines. You'll need to contact them directly at (410) 764-4777 to get specifics about entity approval requirements and whether you need approval before or after filing with SDAT.
Your Maryland healthcare entity faces the same compliance requirements as general business entities—no separate healthcare-specific procedures. The consolidated approach streamlines certain aspects, but those strict deadlines create real operational challenges.
You must file Form 1 Business Entity Annual Report by April 15 each filing year, with a 60-day extension available to June 16 upon request. The filing fee is $300 for most entities, including your healthcare PC or LLP.
This form combines your annual report with personal property tax obligations. You'll report your entity type, FEIN, NAICS code, gross sales, and all tangible personal property you own or lease in Maryland as of January 1. If you have less than $20,000 in personal property, you can certify that fact directly without detailed schedules—a relief for solo practitioners and small group practices.
Miss the April 15 deadline without requesting the 60-day extension, and you'll lose "good standing" status immediately, face possible late penalties, and risk forfeiture of your business entity.
Maryland doesn't impose a separate franchise tax. If you organized as a corporation, you'll file Form 500 (Corporation Income Tax Return) by April 15—even if you're inactive or have no taxable income. Pass-through entities (S Corporations, Partnerships, LLCs) must file Form 510 or Form 511 by the same deadline and pay tax on behalf of nonresident members unless electing entity-level tax payment.
Electronic filing through Maryland Tax Connect is required if you're claiming business tax credits.
Senate Bill 321 and House Bill 352, enacted in 2025, affect business taxation and property tax compliance. Most provisions became effective June 1, 2025. The 2026 Regular Session Synopsis indicates alterations to personal property tax exemptions for low assessment business personal property, effective October 1, 2026.
Your individual physician licensing requirements directly impact your healthcare entity's ownership eligibility and operational authority. The Maryland Board of Physicians administers licensing through a strict biennial renewal cycle with immediate operational consequences.
COMAR 10.32.01.10 requires you to complete 50 CME credit hours per biennial renewal cycle, with at least 25 hours as Category I credits. You're exempt from CME for your first renewal after initial licensure or reinstatement. You must retain documentation for six years, though you don't submit it at renewal unless the Board requests it during audits.
CME non-compliance carries financial penalties of $100 per missing credit hour. If you miss all 50 required hours, you'll face a maximum potential penalty of $5,000.
The biennial renewal cycle divides physicians alphabetically: last names A-L renew in even-numbered years; M-Z renew in odd-numbered years. Your renewal period opens July 15 and closes September 30 at 11:59 PM EST with no grace period.
Here's the critical operational risk: when your license expires on September 30, your authority to supervise staff terminates immediately. Active Maryland licensure is mandatory for you to supervise medical staff and delegate medical duties. If your healthcare entity depends on physician supervision—professional corporations, group practices, any structure requiring physician oversight—an expired license potentially halts operations that night.
The biennial renewal fee is $512, which includes the renewal fee, physician rehabilitation/peer review program fee, and Maryland Health Care Commission assessment.
You can't co-own a medical practice with non-physician healthcare professionals like nurse practitioners or physician assistants in Maryland. Professional corporations providing medical services may only issue stock to licensed physicians. This restriction stems from Maryland's Corporate Practice of Medicine doctrine, enforced through Title 5, Subtitle 1, §14-303(a), and common law principles confirmed in Tormarco Harris v. State of Maryland.
Can a non-healthcare corporation employ physicians to provide medical services in Maryland?
No. Under §14-303(a), standard business corporations can't employ physicians to provide professional medical services. Only professional service corporations with 100% physician ownership, hospitals, or HMOs can employ physicians. This is Maryland's Corporate Practice of Medicine doctrine at work. MSOs can handle administrative tasks like billing and scheduling, but they can't employ physicians or control clinical decisions.
What happens if a physician's license lapses while they own a professional corporation?
Your license expiration creates immediate operational consequences. Maryland provides no grace period beyond the September 30 renewal deadline. When your license expires, your authority to supervise staff terminates immediately, potentially halting entity operations that depend on physician supervision. For professional corporations requiring physician oversight of medical staff, an expired license can trigger immediate operational shutdown. You must renew by September 30 to maintain uninterrupted practice authority and entity operational continuity.
Are Professional Limited Liability Companies (PLLCs) available for healthcare practices in Maryland?
No. Maryland doesn't recognize Professional Limited Liability Companies as a distinct entity type for healthcare professionals. The SDAT List of Entities for 2026 confirms this limitation. You must select among Professional Corporations (PC), Professional Associations (PA), or Limited Liability Partnerships (LLP). Standard LLCs are available but create Corporate Practice of Medicine compliance risks for physician-owned medical practices.
What are Maryland's annual filing requirements for healthcare professional entities?
You must file Form 1 Annual Report and Personal Property Tax Return by April 15 annually with a $300 filing fee. No separate healthcare-specific filing procedures exist—you use the same form as all other Maryland business entities. You can file online through BusinessExpress.Maryland.gov, by mail, or by hand delivery. Healthcare entities organized as corporations must also file Form 500 (Corporation Income Tax Return) by April 15, while pass-through entities must file Form 510 or Form 511 by the same deadline. If you have less than $20,000 in personal property, you can certify that amount instead of providing detailed reporting.
Can physicians and non-physician healthcare professionals (nurse practitioners, physician assistants) co-own a healthcare practice in Maryland?
No. Maryland prohibits multi-discipline ownership of medical practices. Professional corporations providing medical services may only issue stock to licensed physicians under Title 5, Subtitle 1. This restriction stems from the Corporate Practice of Medicine doctrine, enforced through statutory prohibition (§14-303(a)) and case law (Tormarco Harris v. State of Maryland). The Maryland Board of Physicians enforces CPOM compliance through its oversight of professional corporations.
Maryland's dual regulatory framework creates dozens of critical deadlines across your practice and those strict no-grace-period rules leave you zero room for error.
Discern automatically monitors your entity's good standing status with SDAT and alerts you 60 days before the April 15 deadline. Track all your Maryland compliance deadlines in one platform.
Ready to simplify your healthcare entity compliance? Book a demo with Discern today and reduce administrative burden while maintaining compliance.
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