Business Structures for a Death Doula - Sole Proprietorship vs Limited Liability Company (LLC).

This video discusses death doulas' most common business structure choices: Sole Proprietorship vs. Limited Liability Company (LLC). It also discusses the more involved 501(c)(3) route.

From the upcoming book, Becoming a Death Doula:
"Sole Proprietorship: Simple but Unlimited Personal Liability

A sole proprietorship is the simplest business structure. You are automatically deemed a sole proprietor if you begin working as a death doula and fail to register your business as a separate legal entity.

Pros:
* Easy and inexpensive to set up, you often start working.
* You have complete control over your business decisions.
* Income is reported on your personal tax return, so there’s no separate business tax filing.

Cons:
* You are personally responsible for all business debts and legal liabilities. If someone sues your business or you owe money, your personal assets (like your house or savings) could be at risk.
* It can be harder to get business loans or attract partners.

Example: Many new doulas begin as sole proprietors, especially if they are testing the waters with a few clients. However, as their business grows, most look for more protection."

"Limited Liability Company (LLC): Protection of Personal Assets, Tax Flexibility

An LLC is a popular choice for many small business owners, including death doulas, as it establishes a legal separation between you and your business.

Pros:
* Your personal assets are generally protected if your business is sued or has debts.
* LLCs are flexible in their tax treatment. You can choose to be taxed as a sole proprietor, partnership, or corporation.
* Less paperwork and fewer formalities than a corporation.
* You can have one owner (a “single-member LLC”) or multiple owners (a “multi-member LLC”).

Cons:
* State filing fees and annual renewal costs vary depending on the state in which you reside.
* You will need to keep your business and personal finances separate.

Example: Jasmine formed an LLC for her doula business after working as a sole proprietor for a year. She wanted to protect her savings and house in case of a lawsuit. Establishing the LLC provided her with peace of mind and enhanced her business's professionalism in clients' eyes."

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