When you open your own veterinary practice, choosing the right business structure is a vital step. There are several options from which you can choose. The structure you select will affect your taxes, liability, and other important issues. At Reliance Consulting, LLC, our accountants can help you choose the most appropriate structure for your practice. We offer specialized business entity structuring for veterinarians, and we understand the particular requirements of your industry. Once you have chosen the right entity, we can help you with paperwork and tax planning. Before you take this important step in your career, contact Reliance Consulting, LLC for guidance.
If you own your own practice, and you do not have a business partner, you may establish your company as a sole proprietorship. In terms of taxes, there will be no distinction between you and your business. All company expenses and income will be included on your personal tax return. Although a sole proprietorship can be an easy and cost effective method of conducting business, sole proprietorships do have some drawbacks. First, without the protection provided by a separate legal entity, you have sole financial and legal liability for your company. This means that your personal financial future may be at stake if your practice falters. You will also be held liable if an employee makes a serious error. Additionally, sole proprietorships can result in higher taxes as all of the sole proprietorships income will be subject to Self-Employment taxes in addition to income taxes.
If you are opening your practice with a colleague, you may want to establish your business as a partnership. You might also choose this structure if you have received funding from investors. There are two primary types of partnerships. In a general partnership, all owners are personally liable for the partnership debts.. In a limited partnership, the limited partners are only liable for the amount of investment they have in the partnership. At the same time, they also have less input in managerial decisions. In general, partnership structures are most effective where flexibility is required in the allocation of profits and losses between partners.
Like many veterinarians, you may choose to incorporate your practice. A corporation offers several significant advantages. First, your personal liability is limited to only actions you perform. Unlike a partnership or a sole proprietorship, you typically won’t be held liable for the actions of your employees or co-owners. We will work with your legal counsel to help you understand these benefits. In additions, there can be tax benefits to operating in corporate form. If you decide to incorporate your business, you will need to choose between a C Corporation and an S Corporation. Both types offer different tax benefits. Our accountants can help you sort through the pros and cons and choose the right structure for you. In addition, there is a lot of paperwork involved in setting up a corporation. The accountants at Reliance Consulting, LLC are highly familiar with Florida incorporation laws. They can help you navigate these policies and make the process much less stressful.
Limited Liability Companies (LLCs)
Limited liability companies are the fastest growing type of business entity in the country. This structure combines aspects of corporations with elements of partnerships and/or sole proprietorships. As in a partnership, members of an LLC report all profits and losses on their personal tax returns. Members also do not have personal liability for the actions of the veterinary practice. In many cases, LLCs are easier to maintain from an administrative standpoint. Note that you do not have to have a business partner to establish an LLC. Even if you are the only veterinarian working in your practice, this structure can protect you and your family from financial liability. As the only owner of an LLC, you can file a sole proprietorship tax return or elect to be taxed as an S-Corporation.
Reliance Consulting, LLC Can Help You Choose and Set up a Business Entity
There are a number of things to consider when choosing a business entity. As a brand new clinic owner, you do not have to make these decisions on your own. The accountants at Reliance Consulting, LLC can further explain the tax and liability benefits related to each of these structures. They can also analyze the requirements of your practice and help you choose the right structure for you. We are familiar with the needs of small business owners in general and veterinarians in particular. After you have selected and established a business structure, you can come to us in the future with any questions or concerns.
Contact Reliance Consulting Today
Start your practice off on a sure footing by choosing the right business structure. Contact our Tampa firm today for guidance. We proudly serve clients from across the Tampa Bay area, including St. Petersburg, Clearwater, Sarasota, Pasco, and Lakeland.