Amanda Howard, Esq. 

One of the first steps to take when getting ready to start your healthcare practice is to choose its structure. There are four main types of structure a business can take.

1. Sole Proprietorship: A sole proprietorship is the default term for an individual running a business. No action is taken to form a separate legal entity as there is no separate legal entity. There is no separate taxation on business earnings as the individual is personally taxed for such business earnings. One of the most important drawbacks of a sole proprietorship is that an individual is personally liable for all business obligations.

2. Partnership: A partnership is just like a sole proprietorship except for there are two or more individuals running a business together.

3. Limited Liability Company: A limited liability company comes into existence upon filing articles of organization with a state authority. Typically, members enter an operating agreement that sets out the rules of the business and ownership interests. Like a sole proprietorship and partnership, members are personally taxed for business earnings. However, unlike a sole proprietorship and partnership, members are protected from personal liability for business obligations. 

4. Corporation: A corporation comes into existence upon filing articles of incorporation with a state authority. Officers operate the corporation and the board of directors oversees the officers. The owners of a corporation are its shareholders. The default tax arrangement is that the corporation and shareholders are both taxed. Like members of a limited liability company, shareholders are protected from personal liability for business obligations. 

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As a boutique law firm dedicated to supporting the healthcare community, our goal is to ensure our clients are protected. If you have questions about business structure, contact us at Florida Healthcare Law Firm to set up a consultation today.