Massage & Bodywork

MAY | JUNE 2022

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76 m a s s a g e & b o d y wo r k m ay/ j u n e 2 0 2 2 Business Structure 101 Sole Proprietorship vs. LLC, and What's an S-Corp? By Allissa Haines and Michael Reynolds Owning a massage business comes with wearing many hats. You are the practitioner, marketer, office manager, chief financial officer, and chief executive officer. As the owner, it's important to have a basic understanding of various business and financial concepts. One such concept is the difference between different types of business entities. When you open a business, you are creating an entity: a thing that operates outside of just you as a person. While it may be obvious that larger businesses and corporations are entities, a solo massage practice is also an entity. It's a real business that follows similar business rules. Massage practices generally fall into one of three types of business entities. For the purposes of this discussion, we will assume your business is a solo massage business with no partners. With this in mind, a solo massage practice will usually be structured as a sole proprietorship, a single- member LLC, or an S corporation. Let's start with the simplest of business structures: the sole proprietorship. SOLE PROPRIETORSHIP The sole proprietorship is extremely simple to set up because it actually requires no setup. You don't need to take any formal action to use this entity—it's the default business structure created the first time you accept payment for your massage services. By nature of being in business, you are a sole proprietor. When you operate as a sole proprietorship, your business name is automatically the same as your own name. This is how many massage therapists operate. However, if you operate under a different business name, you will need to file a fictitious name, assumed name, or DBA (which stands for "doing business as"), which are all different terms for the same thing. For example, if your name is Jenna Jones and your massage business is called "Purple Lotus Massage" then you will need to file the DBA for Purple Lotus Massage. essential skills | BLUEPRINT FOR SUCCESS NOTE: This article was not written by a tax professional. ABMP does not intend the information in this article to be official tax advice. Please consult a certified tax preparer regarding the material in this article to determine whether it is applicable to your situation.

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