Legal Environment of Digital Health: Rules, Regulations and Laws that Govern Digital Health Business Design and Ownership

Abstract

Most digital health entrepreneurs understand the value of structuring a new venture within a legal entity, such as a Limited Liability Company (LLC) or C corporation. Using a legal entity protects the digital health entrepreneur’s personal wealth from any claims arising within the business. However, this is just the first step digital health entrepreneurs should take to protect against the numerous types of claims they may face—both from within and outside the business.

There are numerous additional steps the digital health entrepreneur can take to ensure that a claim arising within the business does not result in the business losing its most valuable assets. Moreover, the owners of the business (i.e., of the LLC membership interests or corporate shares) can also take steps to ensure that they do not lose control of those interests or shares to a claim arising outside the business. This chapter addresses these risks and the steps digital health entrepreneurs should consider to reduce the risk of loss.