My husband and I are opening our own business and debating the different business types. Wondering for our business idea, what is best.
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My husband and I are opening our own business and debating the different business types. Wondering for our business idea, what is best.
The business is two-fold. One piece is consulting and training with local hospitals on improving pediatric and family-centered care. The second is a Family Enrichment Center, offering children’s art & cooking class (ages 4-8yrs), developmental playgroups (birth-5 yrs) and parenting classes. Our greatest concerns are protecting our personal assets, liability, and taxes.
Asked on June 24, 2009 under Business Law, Massachusetts
Answers:
Raymond P. Bilodeau / Raymond P. Bilodeau, Attorney at Law
Answered 14 years ago | Contributor
The consulting and training component does not present a problem. The child care services component carry the risk of child abuse or neglect complaints. Protecting your personal assets through a limited-liabilty business entity is difficult in closely-held entities. You have to give up a lot of control to third parties (shareholders, board of directors) to really limit personal liability.
Tax matters generally: income tax management to avoid double taxation requires a subchapter-S tax status (this can also count against limited personal liability); for other tax issues, you're better off consulting an accountant or tax specialist.
You may want to consider a non-profit corporation rather than a for-profit entity.
You are much better off getting good insurance coverage, though as a child service provider you may find the premiums high, even if you can find an insurer. Be sure to get an umbrella policy covering all liability, including the broadest liability coverage you can get. Keep in mind no insurance will cover intentional harm or criminal acts.
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