Sole Proprietorship Or LLC?

[anthonydavis]

I have a friend who is planning to start a massage business. She is a licensed therapist. She already rented a place and will be hiring 2 independent massage therapists and she herself will perfom massages to clients.

Now shes, thinking if she would consider sole proprietorship or a corp like LLC?

If one of the contractors did something illegal(like sexual massage, etc,) would she be responsible for it

If the contractor hurt a client during massage, would she be responsible for it? Should that be covered by insurance or the contractor buy their own insurance.

Any help on this please...

[DeenaEsq]

I think I saw this question on another site, but you seem to be a different OP, so I'll post the answer I gave here:

First, a corporation and an LLC are two different business forms. I would almost always suggest using an S-Corporation or an LLC for a small business starting up to give the new business a liability shield. I suggest an LLC. She needs to make sure that it's set up properly and that all company formalities are followed correctly to maintain the liability shield.

If the contractors have specific independent contractor agreements with her and they are treated like contractors, rather than employees, then she would be shielded from liability. Each independent contractor massage therapist should maintain their own insurance. Your friend should have insurance for herself as a therapist and insurance for her business (in case someone slips and falls on the way in or there's a fire and she loses all of her equipment, etc.).

It's probably also worth a mention that she needs to check the laws in her own state and locally to see if the business needs to be licensed or permitted.

Hope that helps. Let me know if you have other questions.

Deena Burgess, Esq.

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Any opinions are offered without knowledge of the specific law of your jurisdiction and with only the limited information provided in your post. No advice given here should be reasonably relied upon by you or any third party without consulting an attorney who is aware of all of the facts and law surrounding your situation. Any advice given here is not intended to create an attorney-client relationship in any way.

[Tom Young]

You may find a visit to http://www.score.org/index.html where you can get FREE & CONFIDENTIAL business advice helpful.

I have operated my business as a sole proprietorship since 1975 finding no reason to incorporate.

Your situation is different and you may find incorporating a good move as a means of protecting your personal assets in the event of legal issues down the road.

Tom