QUESTION
Do I need an LLC or can I work as a sole proprietor and just get business insurance? I'm a lic.professional counselor working independently virtually.
Asked on Dec 27th, 2021 on Business Law - Pennsylvania
More details to this question:
I'm working out of my home virtually using telehealth, taking self-pay rates from approximately 10-12 clients per month, charging $120 an hour. I do not plan on hiring employees and I would use my personal name for counseling instead of an actual different business name. I am a licensened professional mental health counselor who has professional malpractice insurance. Would I need to also add in business insurance and work as a sole proprietor or would I need to form an LLC? Either way I think I would need an EIN to protect my identity from clients instead of using a social security number.
1 ANSWER
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Generally, there is no requirement that you incorporate. However, it is generally advisable for several reasons. The first reason is to insulate yourself from liability. While I appreciate that a counselor, like a lawyer, can still be personally liable for negligence, etc, an LLC will generally insulate you from liability for trade debt. Also, I find that it is cleaner as a corp, and an LLC is merely a form of corp, will require a separate business bank account and tax return. However, if you are a solely owned LLC, the IRS requires that you file a Schedulke C on your 1040.
I regret if this sounds a little too much inside baseball, but suffice to state that, if you are considering incorporating, you should speak to an attorney about your options.
I trust this answers your questions and, if you live in the Delaware Valley, feel free to call or email me on a free initial basis.
Best Regards,
Matthew R. Nahrgang, Esquire
35 Evansburg Road, Ste 400
Collegeville, PA 19426
(610) 489-3041 o
(610) 489-3042 fax
nahrganglaw.com
Answered on Dec 31st, 2021 at 10:03 AM