Issue link: http://cp.revolio.com/i/142672
legal structures of business For the massage practitioner, there are four basic, viable legal structures for a business: limited liability company, sole proprietorship, partnership, and corporation. Within these, there are numerous variations—general and limited partnerships, professional service corporations, or S corporations, for instance—but these four are the building blocks of all business legal structures. Each has its advantages and disadvantages, but deciding which you should choose for your business is not as complicated as it might sound. More than likely, the goals you've already set for your business will indicate which of these business structures is best for you. Also, don't worry about making the wrong choice, because you won't have to be stuck with it forever. If you choose to be a limited liability company (LLC) or a sole proprietorship, it is fairly easy to change that into a corporation down the road if you need to. Limited Liability Company According to author Daryl Kulak, almost every holistic health practitioner should set up as an LLC. That's because an LLC combines some of the best characteristics of corporations, partnerships, and sole proprietorships. Advantages • separate legal entity like A a corporation, thus owners have liability protection. • reated as a partnership for tax T purposes. As a "flow through" entity, it does not pay income tax. Profits and losses flow through to the tax returns of the individual members, so you avoid double taxation. • umber of "members" (not N "partners" or "shareholders") is unlimited. • f someone sues your business, I they cannot lay claim to your personal assets. Disadvantages • ill dissolve when a member W dies or undergoes bankruptcy. • ore paperwork than a sole M proprietorship or partnership. • n some states, there must I be at least two members. You will need: • o file articles of organization T with the secretary of state. • o establish an operating T agreement to help define profit sharing, ownership, responsibilities, and ownership changes. • o check with your local state T office for varying rules governing formation of an LLC. Sole Proprietorships This is a very common type of business. You own it, you take responsibility for it, and its profits (losses) are the same as your income. As a default, if you do nothing (i.e., file no papers, etc.), you are a sole proprietorship. A sole proprietorship may be operated under your own name, or you may choose a business name that will be your d/b/a (doing business as). Advantages • Easy to start. • usiness profit/loss is B reported on Schedule C of your individual tax return. Disadvantages • ou are personally liable. If Y someone sues your business, they can lay claim to your personal assets, like your home. • f you decide to grow, finding I financial resources, such as loans or lines of credit, will depend on your personal credit history and net worth. You will need: • business license issued A by the city or county where the business operates. Partnerships If you have ever considered starting a practice with one or more of your peers, you may want to consider forming a partnership. A general partnership is a lot like a domestic partnership— you and your partner(s) agree to share the responsibilities and rewards of your business. Just as people sometimes choose to form a domestic partnership without marriage, there is no requirement that business partners sign any kind of written agreement. But the experiences of countless