MSO - Management Services Organizations

What Fortune 500s quietly use… now built for business owners like you.

What is an MSO?

An MSO, or Management Services Organization, is a separate legal entity that contracts with your operating company to provide administrative, back-office, or management services. Think of it as a strategic carve-out that allows you to legally shift income away from your main business — and with it, reduce taxes, increase personal control, and unlock powerful planning options.

This is not some theoretical shell game. It’s a well-established structure used by law firms, medical groups, real estate businesses, and other service-based entrepreneurs who want to optimize income, enhance liability protection, and plan more like a corporation — even if they’re a small business.

Done right, the MSO becomes the financial quarterback of your operation.

Who are MSO’s for?

An MSO isn’t just for healthcare systems or hospital networks. We design them for:

  • Medical, dental, and chiropractic practices looking to separate clinical and administrative functions.

  • Law firms and financial professionals seeking strategic tax positioning.

  • Real estate developers or brokers who want to allocate income across multiple entities.

  • Entrepreneurs in high-margin service businesses who want to take more control of their income and retirement planning.

  • Partners and founders preparing for succession, sale, or generational wealth transfer.

  • Anyone with $500K+ in net business income, looking for a legal way to shift profits, reduce audit exposure, and accelerate wealth building outside of their operating entity.

Whether you have a team of 3 or 30, if your business is profitable and professional, this may be the structure that bridges small business and big business planning.

How does an MSO work?

The 412(e)(3) plan is a fully insured defined benefit plan governed by strict IRS rules — but when designed properly, it becomes a tax-deductible powerhouse that rewards both you and your employees.

  1. We set up a new company — your MSO
    The Management Services Organization is a separate legal entity that you (or a trust you control) own. It doesn’t replace your current business — it complements it. Think of it as the administrative and financial hub that supports your operations.

  2. Your operating company signs a service agreement
    The MSO provides real, documented services — admin, HR, billing, compliance, marketing, you name it. We build a formal contract between your operating business and the MSO, with IRS-compliant pricing based on fair market value.

  3. Revenue legally shifts from the op-co to the MSO
    A portion of your business income is paid to the MSO as compensation for services rendered — often 20–40% of net income, depending on your industry and margins. That money leaves your main entity, reducing its taxable income.

  4. The MSO becomes your planning powerhouse
    Because it's a separate company, the MSO can now sponsor its own retirement plans (like 412(e)(3)), offer benefits, employ family, or fund insurance — all while keeping it cleanly off your main business’s books.

  5. You keep more, control more, and plan further ahead
    Structuring your enterprise this way creates clearer tax savings, lower audit exposure, and more long-term optionality — whether you're planning to scale, sell, or pass your business to the next generation.

Frequently Asked Questions

  • An MSO (Management Services Organization) is a separate company that provides administrative and management services to your operating business. It’s designed to help you legally shift income, optimize taxes, and create a platform for advanced planning — all while improving operational efficiency and liability protection.

  • No. While MSOs are popular in healthcare and professional services, they’re valuable for any profitable business looking to separate functions and unlock new tax and wealth-building strategies — especially if you have $500K+ net income.

  • When structured correctly, MSOs are fully compliant with IRS rules. We ensure all service agreements are at fair market value with proper documentation, which minimizes audit risk and strengthens your tax position.

  • Yes. Even solo business owners or very small teams can benefit if their income is high enough. The MSO lets you layer tax strategies and plan for the future in ways a single business entity can’t.

  • There’s some added paperwork — a separate tax return for the MSO and formal service agreements — but the tax savings and planning flexibility usually outweigh these costs. Plus, we help manage compliance and paperwork to keep it hassle-free.

  • Absolutely. In fact, the MSO often enables new planning options like 412(e)(3) plans, life insurance funding, or employee benefits that your operating company can’t easily provide on its own.

The Tools Behind the Layers

Each TEL strategy has its own role. When layered, they multiply value.

Click Below to Examine each one.

Ready to Layer Up?

You’ve worked too hard to leave your financial future to chance. If you're ready to use the tools the ultra-wealthy have used for decades — and apply them to your business or household — let's talk.