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Choosing a Business Structure

 

Deciding how to structure your virtual assistant business is an important choice as you set up your new venture. There are a handful of options with this decision, and they can affect how you run your business, how taxes are handled, and the future of your business. It is important that you speak with an attorney and your accountant prior to making this decision, especially if you are unfamiliar with the terms and choices.

The easiest structure to work with is the sole proprietorship. These typically have one owner, and it is very inexpensive to get started. You will gain total control of your business with this method. The downside to this is that you generally receive less assistance regarding debts and liability. Many sole proprietors must reach into their own pockets if the business starts to show a loss in profit. However, if you have a very small business that you do not want the government’s nose in, this may be a good choice for you.

Partnerships are also another route to take when choosing the structure of your business. With this option, you will create the business and own it jointly with one or more people. You will have to share the responsibilities and decisions, as well as profits. A benefit of a partnership is that you will not be totally responsible for events that occur within the business. However, you will be liable for the actions of your partners. Businesses structured in this manner tend to have shorter life span, as they will dissolve once a partner decides to leave the business.

An LLC (Limited Liability Company) is a newer route for structuring your virtual assistant business. This one combines the liability benefits of a corporation with the tax benefits of a general partnership. It typically involves the ownership of several people. The members of the LLC can document the profits and losses of the business or they can choose to be taxed similar to that of a corporation.

About Stephanie Watson

Mom | Wife | Virtual Assistant | Content Strategist
Stephanie has been working from home for over 20 years as a virtual assistant, template bender, and content writer. She's currently transitioning to business coach. You can learn more about her at her website http://www.barrypublishing.com.

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