Question: Which Business Entity Is Best Suited for My Business?
8/22/2018
I am private chef seeking to write up a business plan to teach cooking for couples in a creative and fun atmosphere.
Workshops will be one half day to a full day. They will take place in hotel conference rooms, cooking shops, private homes or anyplace where I will receive permission from the owner to use their space.
I may hire independent chef instructors to teach so I can focus on operating the business.
I’d like to keep my personal & business finance separate and prevent double taxation. Which form of business entity is best suitable for my business interest?
Answer: An S corporation would be very suitable to your purposes
However, make sure about properly classifying the instructors you mentioned as employees or independent contractors. You should discuss this with your business attorney.
Over the past several years, this has become a huge issue and I have defended so many employers who misclassified their employees as contractors.
In addition, do not rely on the advice of a non-professionals in the field or internet services about incorporation. Make sure that your business is incorporated by a business attorney and be sure comply with all corporate laws including maintaining your corporate formalities at least once a year at a minimum.
Be sure to draw up all contracts in the name of the corporation. Pay yourself a reasonable amount of salary. Do not commingle your personal money with the bank account for the corporation. Start with a reasonable amount of capital in the bank to pay creditors. Record the capital raised with the Commissioner of Corporations. Do not forget to issue stock and record it in your share ledger.
