Sole Vs Partnership

[Cory]

For those of you that already own your lab, what type of business entity do you think would work best as a 1-person lab? i'm leaning toward sole proprietorship, but only disadvantage would be liability; already having the startup capital, doing a partnership would be just as a protection for my personal assets. I guess my question would actually be, is there much liability in the business?

 

[JMN]

For those of you that already own your lab, what type of business entity do you think would work best as a 1-person lab? i'm leaning toward sole proprietorship, but only disadvantage would be liability; already having the startup capital, doing a partnership would be just as a protection for my personal assets. I guess my question would actually be, is there much liability in the business?

Liability is something you'd be as stuck with in a partnership. The only way to truly get out of your personal assets being at risk is a S or C corp in most places. LLCs may places look more professional, but offer little real difference from D/B/A or Sole Proprietorship even on taxes, they're done exactly the same.

Talk to multiple accounting groups and ask this question of them as you feel out who you'd like to help you on that side. I got some interesting answers, but they all came down to what I told you above. Remember all states are different, so YMMV.

 

[Cory]

Thanks for your input. Yeah i had meant to say LLC not partnership; I guess for a small 1-person lab anything other than sole proprietorship would be just too much paperwork and complications. More than likely that's what i'll go with, but will consult with accountant first just to be on the informed side. Thanks!

 

[user name]

Thanks for your input. Yeah i had meant to say LLC not partnership; I guess for a small 1-person lab anything other than sole proprietorship would be just too much paperwork and complications. More than likely that's what i'll go with, but will consult with accountant first just to be on the informed side. Thanks!

One person here. Sub chapter S corp is the only way to go in my opinion. Personal protection is huge; not just from a screwed up job that gets you sued, but as simple as someone getting hurt on your property by no fault of yours. "fall on the sidewalk, broken wrist, medical expenses, time off work for you to go defend yourself so you can wind up paying their lost wages, etc. Its cheap and simple to do. Then cover your butt with a good insurance policy. Its also worth noting that as a sub-S you can claim half the income as that, the other half as dividends, thus protecting it from social security tax.

 

[Doris A]

Cory, since you just got out of school, I would suggest that you work for someone else for a couple of years and get some real world experience under your belt and THEN go for it and open your own lab.

 

[Cory]

Cory, since you just got out of school, I would suggest that you work for someone else for a couple of years and get some real world experience under your belt and THEN go for it and open your own lab.

Doris, I didn't just get out of school, i've been doing lab work in the Navy for about 5 years now, what i had said was that i'm getting out of the military soon.

 

[Doris A]

Doris, I didn't just get out of school, i've been doing lab work in the Navy for about 5 years now, what i had said was that i'm getting out of the military soon.

Oops, sorry about that, it was Kate that just got out of school.

 

[Cory]

Oops, sorry about that, it was Kate that just got out of school.

no problem, I figured since we both joined recently, probably got confused. Thanks for the feedback though, it is always good advice to get experience before jumping head first

 

[CatamountRob]

no problem, I figured since we both joined recently, probably got confused. Thanks for the feedback though, it is always good advice to get experience before jumping head first

That's not it, Doris hits the bottle early on Tuesday's. It's Michigan Rummy night with her homies.

 

[Cory]

Hey, its 5 o'clock somewhere... for all intents and purposes, my drink is mostly coffee, the creamer just happens to be Bailey's

 

[2thm8kr]

Hey, its 5 o'clock somewhere... for all intents and purposes, my drink is mostly coffee, the creamer just happens to be Bailey's

So you like coffee with your Bailey's

 

[Doris A]

I like Bailey's with my Bailey's, on the rocks!!

 

[Juko]

Sole proprietorship here. Small time though, only work a couple days a week. Mostly bread and butter. Singles and small bridges. A few implants a year. I have professional and product liability insurance. Each state is different for amount of liability that falls upon lab.

 

[Cory]

Professional and product liability insurance is definitely something i have to look into. Thanks!

 

[Jason D]

Go LLC with an "S election" this provides the best combination of tax and legal protection.
Liability insurance is a necessity for any company, if you intend to have employees then you will want business practices liability as well as general and product.
You need to define carefully a lot of things...a simple example is defining ownership of a delivery vehicle if you will deliver your cases. limits of liability there are steep, but necessary.
You need a good accountant, lawyer, insurance agent and Banker for any serious business venture, they will keep you out of trouble with the elements of business you may not have been exposed to yet.
You should have a business plan and vision before you consider opening doors.

anything else is just a hobby and hobbyists are getting decimated in this industry.

Now, if you are doing it for a hobby, then have fun and don't worry about the 'business stuff'

 

[dborla01]

Good luck Cory, with your future. Did you go to Navy Class C School? And good advice from folks here.

 

[Cory]

Good luck Cory, with your future. Did you go to Navy Class C School? And good advice from folks here.

Thank you! and yes i did

 

[Solaris]

Hi Cory,

Are you an all around technician?
Because it would be a big asset if you know your profession from all sides. Beside technical skill you would need administration, marketing and a good communication skills.
Sometimes a partner can take care of someone of the shared responsibilities.
In short term a partner can be very helpful but in long run it may cause lots of friction. Just like a marriage


Sent from my iPhone using Tapatalk

 

[sidesh0wb0b]

Liability is something you'd be as stuck with in a partnership. The only way to truly get out of your personal assets being at risk is a S or C corp in most places. LLCs may places look more professional, but offer little real difference from D/B/A or Sole Proprietorship even on taxes, they're done exactly the same.

Talk to multiple accounting groups and ask this question of them as you feel out who you'd like to help you on that side. I got some interesting answers, but they all came down to what I told you above. Remember all states are different, so YMMV.

thats actually not true, LLCs offer much more protection than DBA or sole prop. speaking with an attorney and CPA will help loads on this question, but i can assure you there are far more protections via an LLC than SP or LP or DBA

 

[JMN]

thats actually not true, LLCs offer much more protection than DBA or sole prop. speaking with an attorney and CPA will help loads on this question, but i can assure you there are far more protections via an LLC than SP or LP or DBA

Interesting. I'll have to ask better questions next time I get to talk to someone. I was understood it was effectively a very thin wall. Thanks!