Selecting Nursing Agency Business Structure, Limited Liability Company (LLC)
Nursing Business Structure, Limited Liability Company (LLC)
As an entrepreneur, it is your requirement to arrive at essential decisions in
the wisest possible manner. One of the things you need to close is the type of
business structure you will adapt for your nursing business. Aside from the very
common sole proprietorship, partnership and corporation, this article will give
you the basics of another business entity—Limited Liability Company (LLC).
A limited liability company (LLC) is a business structure that synthesizes the
elements of a corporation and a partnership. Sometimes they termed it as Limited
Liability Corporation though this is not the proper term since it is neither a
corporation nor a partnership type of business ownership. The owners are called
members whose liability is limited only to their total investment on the nursing
business. The number of members in an LLC can be at a minimum of one owner up to
an unlimited number of members.
Pros of LLC
The liability of a single member is based only on the amount he or she invested
on the company. No members are obliged to pay the company’s debts that unless a
personal guarantee is signed.
Flexible Profit Distribution
The profits gained in an LLC can be distributed to its members in any ratio they
agreed upon. This gives a limited liability company a great flexibility in
matters of profit sharing
No Required Shareholder’s meeting
The operation of an LLC is trouble-free for it is spared from having meetings,
resolutions, and formal minutes. This is in contrast with a corporation that
requires such meetings.
No Business Tax
Profits are subjected to tax. However, it is not taxed as a business tax but an
income tax of every member since each member gains different ratios on the
Cons of an LLC
Easy to dissolve
If corporations still exist with the death of a stockholder, in a limited
liability company, if any of the members dies or get bankrupt, the LLC is
Opening the business to investors
An LLC will no longer be appropriate in case the members grant shares to
employees or when it opens to public investors. If such case is done, a
corporate ownership must be adapted.
An LLC business ownership requires more documents to accomplish. For tax
concerns, the federal government still needs to classify it as a sole
proprietorship, partnership and corporation.
Since states vary from regulations on LLC, you should always check with your
state if an LLC is permitted. This writing serves only as a guide for you to
make an informed decision about the subjects of LLC. Since the laws in the LLC
are diversified with the different states, check with the nearest state office
on your area to ask for more information in order to decide the best business
entity on your nursing business.
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