What's right business structure for a process server?
What business structure should a process server choose?
There are many reasons for you to choose the right business structure. Choosing the right business structure can help lower taxes, protect your personal assets, help you raise money.
You will need to have your business structure in mind before you register your business with your state and federal government.
Be careful which structure you choose to avoid your business being disbanded. You would want to talk to an accountant prior to setting up your process serving company.
What are the most common business structures for process serving company
With a sole proprietorship you retain 100% in control of your business. But if you don't register your business under any structure your company will be automatically considered a sole proprietorship if you do any business.
With a sole proprietorship you are not considered a separate business entity. That means all business and personal assets are considered one. Also liabilities are shared. So, if you get sued through your business there's a possibility you can lose your personal assets such as your home and personal savings.
Starting a Sole proprietorship can help you start a business without a bunch of risk and give you a chance to test your business before incorporating.
If you plan on opening your process serving company with a partner, structuring your company as a Limited Partnership(LP) or Limited Liability Partnership(LLP).
In the Limited Partnership there is one with more liability protection than the other partners. That partner is known as the general partner. The general partner tends to have more control within the company and equity within the company. All listed partners would be responsible for paying self-employment taxes on profits
Limited Liability Partnerships act basically the same as Limited Partnership except every owner would receive asset protections for lawsuits and debts against other partners.
Limited liability company (LLC)
For a process serving company, structuring your company as an LLC is often best.
LLC’s offer you the benefit of a corporation and a partnership by protecting from personal liability if sued. Some assets that are protected are vehicles, saving accounts, and Homes.
You benefit from an LLC by losses and profits not facing corporate taxes. Members of the LLC are considered to be self-employed and have to pay self-employed taxes, Medicare, and Social Security.