There are advantages and disadvantages in choosing how your Professional Legal Nurse Consultant (PLNC) business will be structured. You’ll need to choose one that best suits your needs. Here are four potential options: 1) Sole Proprietorship, 2) Limited Partnership, 3) Corporation, and 4) Limited Liability Corporation (LLC). Many states have websites that’ll take you through the steps to register your new business. They may also instruct you how to register your business on the county, or municipal, level as well.
While this is an overview of business structures, this is not a substitute for contacting an attorney and tax advisor, as to which type of business structure best fits your needs. Please contact an attorney and tax advisor so you select the best business structure for your PLNC business!
Four Types of Business Structures for the Professional Legal Nurse Consultant:
Sole Proprietorship
This is the most basic and most popular structure for most PLNC businesses. It’s not as heavily regulated as other structures and you, as the owner, assume all legal and tax responsibilities. The biggest advantage to being a sole proprietor is you have total control over every aspect of your business. Plus, you have less expenses starting out. Remember, that when setting up a sole proprietorship all your business and personal assets are at risk and that any judgments or lawsuits against your business could affect your personal assets as well.
The Limited Partnership
The limited partnership is a cross between a traditional partnership and a corporation. This form of partnership might be good when you have people who are simply interested in investing in your PLNC business but want limited liability and no real control over the business. Limited partnerships must endure more stringent regulations on the state level than a sole proprietorship. There are regulations, including the Uniform Limited Partnership Act, which govern the formation and operation of a Limited Partnership.
The Corporation
A corporation is an entity that’s created by writing and filing your Articles of Incorporation with the Secretary of State (at your state level). A corporation is regulated by the state and includes items such as Articles of Incorporation and Bylaws. These bylaws outline your corporation’s structure including a summary of what your organization does, the number of its shareholders or board of directors, and officers (if any). Corporations are more complex than either a limited partnership or sole proprietorship and are subject to more regulation by the state. Some advantages to corporations include that a shareholder can sell or give away their stock (unless this is restricted in your corporations bylaws) and some tax advantages as well. There’s a certain level of the loss of control because of the organizational structure (i.e. board of directors, officers), regulation and formalities in setting up a corporation, and higher state fees.
The Limited Liability Company (LLC)
A Limited Liability Company (LLC) is a cross between a limited partnership and a corporation. In setting up this type of business, you might have certain tax advantages. Of course, you should consider purchasing a malpractice insurance policy no matter which business structure you form.
An attorney and a qualified tax advisor can guide you through the various differences in tax law for each of these business structures. Don’t let it to deter you from achieving your dream!
You might need a business license, or other regulatory license. Be sure you check with your attorney and a tax advisor so that you select the right entity for you.
P.S. What business structure did you, or will you, choose for your PLNC business?
