Starting a business and forming an entity are two different things.
The benefit of operating through an entity is most debts and obligations of the business are limited to the assets inside of the business; in other words, personal assets of the owner(s) are not at risk. We have had numerous (potential) clients approach LicenseSure, having just opened their doors and anxious to "create a company," but they do not yet need the limited liability protection or – more practically speaking –the administrative paperwork, formation costs, additional tax requirements and ongoing compliance requirements of a formal business entity.
More important for design professionals than forming an entity is professional liability insurance. If a design professional is charged with negligence or misconduct, s/he may be personally liable for malpractice, regardless of whether s/he is practicing through an entity and the only appropriate protection against this is adequate insurance coverage.
Solid reasons to form an entity include:
- The firm has more than one owner.
- The sole proprietor does not have the appropriate professional licensure to accomplish the existing work of the business.
- The business owns or operates its own office space or vehicles.
- Other than contracts pertaining to projects, the business is entering into other significant contracts.
- The business is hiring employees or contracting directly with subcontractors.
When the time is right to organize an entity, and then LicenseSure is here to help!
The Benefit Corporation is considered a hybrid of a for-profit corporation and a not-for-profit in that the directors do not run the corporation solely to maximize corporate value for its shareholders.
Design professionals all over the world have taken to heart the words famously crooned by Frank Sinatra, "I want to be a part of it, New York, New York."
A gratifying part of my business is helping design professionals start their own practices. I usually have a gut feeling about who is going to make it, and who may decide that being an employee wasn’t so bad after all.
I am seeing a lot of action on the Design Professional Service Corporation (DPC) front. The DPC is the only entity in which New York permits non-licensed owners of architecture, engineering and other design professional firms.
Architects and their practices are highly regulated because of their charge to safeguard life, health, property and the public welfare.
Many of my clients and potential clients are in the process of setting up their own design firms.
Starting an architectural firm is a big decision. One of the next big decisions for the architectural entrepreneur is deciding what form of business entity will be appropriate for your current practice as well as your future practice.
When a client comes to us to form a New York business, the first step we take is to evaluate the proposed name of the entity.