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Why is incorporation important when starting an assisted living facility?

On Behalf of | Sep 16, 2022 | Business Law, Healthcare Law

Those who operate assisted living facilities or nursing homes can provide a safe place for people to find quality care for aging loved ones while also taking advantage of this growing market. This industry can prove both personally gratifying and financially beneficial.

What are some of the regulations that apply to assisted living and nursing home facilities?

There are a lot. This industry has a unique set of regulations that are not present in other business endeavors. Lawmakers intend these regulations to help better ensure that nursing homes provide quality care to their residents. In addition to becoming familiar with these regulations, it is also wise for those who own these operations to take careful steps to incorporate the business.

Incorporation can serve as a layer of protection, separating personal assets from the business endeavor.

Does incorporation offer complete protection?

If there is no illegal activity, incorporation offers a very strong level of protection for business owners within this industry.

It is important to set up this business wisely, as the government is not afraid to take steps to hold individual owners accountable for regulatory violations, when possible. In a recent example, the feds are going after a Pennsylvania company for a home they operate in Iowa. The facility was cited for over 100 alleged violations and faced more than $195,000 in federal fines. It ultimately closed operations and the government is now attempting to go through the protections offered by incorporation to hold the owners individually liable for these costs. The government may be able to find success with this process, often referred to as piercing the corporate veil, if they can establish illegal activity, likely fraud in this case.