Starting a hospice company is a compassionate venture. For better and for worse, however, it takes more than empathy and vision to launch a new business in the U.S. Choosing the best legal structure to suit your new enterprise is one of the most consequential decisions you’ll need to make early in the planning process.
The legal structure that you ultimately select will impact everything from the liability protection that the law will automatically afford your business, to taxation and whether your ownership and management structures are inherently flexible or relatively rigid. To better ensure that your hospice company starts on solid ground, it’s important to understand the different options available for legal structuring and how each approach could impact your company’s future.
Options
A sole proprietorship is generally not the best option for hospice companies. Even if you’re planning on operating as a solo business owner, your business will be high-risk enough that you’ll want to consider a limited liability company (LLC) structure if you’re going at it alone. LLC structures – which are open to ventures involving multiple owners (called members) too, will largely insulate your personal assets from liability in the event that your company is sued or fined. A sole proprietorship doesn’t afford this kind of legal safeguard.
Alternatively, you can construct your company as a partnership or a corporation. Corporations aren’t easy to set up, and they feature rigid management structures. However, they offer the best liability protection available. Alternatively, there are a number of different approaches to partnerships that you can employ, if you plan to go into business with at least one other individual.
Seeking personalized legal guidance is wise when structuring a company, both because the act itself is so consequential, and because registering a business is a process that varies from state to state.