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zhm
03-30-2006, 05:53 PM
I am a licensed massage therapist starting my own business. I will be the sole owner, rented a place, and will hire 2 independent massage therapists. I, myself, will also perform massages to clients.

If you were me, would you consider sole proprietorship or a corp like LLC?

If one of the contractors did something illegal( like sexual massage, etc., which is not allowed in my place), would I be responsible for it?

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

too many questions, thank you for your help.

BusinessMan
03-31-2006, 06:05 AM
If one of the contractors did something illegal (like sexual massage, etc., which is not allowed in my place), would I be responsible for it?

The answer here in the UK may well be yes, which is why many people set up a Limited Company (equates to an LLC). This tends to offer a degree of protection for personal assets in many scenarios. Obviously, it also sounds better to potential clients, and so can be a marketing benefit.



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

Again it's a question of what risk profile you are happy with. You can insure your business against all sorts of situations, or none at all. Within the balance you choose cost will be a factor: so I guess the first port of call for you might be to get a few insurance quotes (in terms of legal protection).

I guess overall therefore the first step is research:costs of setting up an LLC, insurance and so on. Then use the data to help you make the decisions.

Christin
04-13-2006, 08:51 AM
In the US as well you would be responsible for their actions. With sole proprietorships the business is a part of you, so if you every got sued for something that one of your employees did, not only could they liquidate your business' assets, but yours as well. Whereas with a LLC, the company and you are considered separate entities. The difference, in my understanding, is that with an LLC you may have higher taxes.

ServiceTunnelcom
04-14-2006, 06:38 PM
LLC is probably your best bet, although I would most certainly look into some kind of sexual harrasment insurance.

I'm not really sure there is a thing, but I know that a lot of people are in your situation and someone has to have come up with a solution.
You might want to get on a massage business forum somewhere and ask them what they did.

I would for sure go with the LLC though.

LLC's are also very good for taxing purposes.

AseronLaw
04-26-2006, 04:25 PM
One thing you may want to check out is whether the agency that licenses massage therapists in your state will allow an LLC to have such a license. Here in California, not all licensing agencies will issue a license to an LLC.

An LLC, if properly formed and operated, should shield your personal assets from liability for business activities. If you don't have any significant personal assets (e.g. a house, cash, etc.), then forming an LLC or corporation doesn't make sense.

I'd be more concerned with the liability you have with respect to the independent contractors that are working out of your office. I suggest you make it clear to any customers that the other massage therapists are operating totally separate from you. You should have written contracts with them with indemnification provisions.

Finally, approach independent contractor relationships with caution: you may think they are independent contractors, but the IRS and the state agency that collects employment taxes may not.

I hope this helps.

bizdev
04-28-2006, 12:39 PM
As a further note:
In the US there is a widespread, common misconception, that by incorporating your business your personal assets are fully protected. This is a fallacy. The "protection" can actually be null and void (whether it be an LLC, S Corp or otherwise) if you sign a Personal Guarantee. The Personal Guarantee overrides the corporation. And the Personal Guarantee will be required by everyone from a landlord to a banker to a credit card merchant company. That is how they get around the corporation's protection.
As always...talk to your lawyer first.

AseronLaw
04-28-2006, 12:53 PM
Excellent point. It's also important to note that failing to treat the LLC as a separate entity, e.g. co-mingling funds, not holding meetings, etc., can also lead to a court finding that the LLC was just a sham, which can put your personal assets at risk.

econtent
07-09-2006, 11:31 AM
Hello.
First off, good luck with your business!

Forming an LLC is so easy, and pretty inexpensive (depending on your state), and it offers similar protection as a Corp, so it really makes sense to give yourself that extra protection and go with an LLC. I think in the case of a massage therapist you would be a Professional LLC (PLLC.) Some states have separate forms for that and you need to provide a copy of a current license for yourself and any employees/contractors. (Check out CA's Secretary of State webiste for all the forms.)

I think in most states you submit your license in order to obtain a business license in your particular county/city.

I would strongly suggest obtaining insurance, using independent contractor agreements reviewed by an attorney, and a client disclaimer form that also indicates all therpaists are independent contractors. Also, make sure your training manuals and/or operations manuals are legally sound as those can be used as evidence should anything happen.

Hope that helps!

Tina
Lead Writer
BuyContentOnline.com

sbatz72
02-09-2014, 01:48 PM
In an LLC you would share the liablility with the massage therapist. In a sole prop. you would need to take sole responsiblity for everything that occurs in your establishment. I think the idea of getting the hired massage therapists to have insurance on themselves is a good idea.

delusional
02-10-2014, 03:53 AM
I would go for an LLC if you are worried about the responsibilities. I'm not saying it's wrong to be worried about the responsibilities. It's best to worry about everything in the beginning, this way you will get everything sorted out before you begin.

tinyfang
03-24-2014, 07:21 PM
As someone else mentioned, many people have the misconception that just because you register your business as a corporation, then it will automatically protect your personal assets from liability. However, this is false. Another person or business can still sue your company and your personal assets can still be at risk. Ultimately, to mitigate this problem, you need to draft up the proper business contracts that shift that responsibility from you to the business itself. This is the real difference between an LLC and an SP. In an SP, the business is still under your name as a personal asset. Where as an LLC allows you to shift that responsibility.

BizAdvisor
12-11-2014, 09:14 PM
As a sole proprietorship, there is no legal separation between you and your business. YOU ARE THE BUSINESS. If your company is sued... YOU are sued. If your company has to pay $1,000,000 in damages... YOU have to pay $1,000,000. This means all your personal assets; house, car, life savings... can potentially be at risk.

As an LLC, your business becomes its own legal entity and its own liability. If your business is sued or has to pay for damages, only your business assets are at stake... NOT your personal assets.

jerrybray8
07-17-2017, 11:14 PM
I suggest you make it clear to any customers that the other massage therapists are operating totally separate from you. You should have written contracts with them with indemnification provisions.

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