update: Your Practice

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+Disclaimer: The following is not legal or tax advice. It represents information and interpretations from multiple sources considered to be canonical or from subject matter experts on running a business, focusing primarily on The United States. Therefore, this information may be different in your country, region, or locality. If you have better sources or information, please do let us know.
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+Anyone can participate in a value-for-value exchange. The parties involved determine what that exchange consists of. A few questions consistently get answered when it comes to running a business and whether you are classified as a business:
+
+- Who gets charged?
+- Who gets paid?
+- Who pays taxes?
+- Who gets sued?
+- Who "owns" the business and assets?
+
+We'll use a possible evolution of a Practitioner from the first customer to possibly exiting or shutting the business down. Even though this is laid out as a progression of steps, it's important to note that the Practitioner may decide at any time to exit (or shut the business down).
+
+## Sole-proprieter
+
+This is the cheapest, most flexible, and easiest starting point.
+
+Meet Lynn. Lynn has decided to provide lawn care services to residents in their neighborhood.
+
+- Who gets charged?
+	- Residents in the neighborhood.
+- Who gets paid?
+	- Lynn (any checks are made payable to Lynn)
+- Who pays taxes?
+	- Lynn
+- Who gets sued?
+	- Lynn ("business" and personal assets): Lynn may also want to purchase liability insurance.
+- Who "owns" the business and assets?
+	- Lynn
+
+It's recommended that Lynn open a second personal bank account for these income and expenses for the lawn care services. This way, Lynn can easily track earned income and expenses related to providing these services.
+
+When Lynn files their taxes, they complete a [Schedule C](https://www.irs.gov/forms-pubs/about-schedule-c-form-1040) tax form indicating that they are "self-employed."
+
+If Lynn provides lawn care services to a registered business (we'll get there), they should receive a [1099-MISC](https://www.irs.gov/forms-pubs/about-form-1099-misc) from the business. These should be received by February of the year Lynn is filing taxes for the previous year's work. (Work performed in 2020 would result in receiving a 1099-MISC in the first three months of 2021.)
+
+Lynn decides to market the business as "Lynn's Lawn Care." Despite using this name on marketing collatoral, Lynn cannot receive payments in the name of the business.
+
+## Doing Business As
+
+Lynn is now the "vendor of choice" for lawn care services in their neighborhood and has a couple of small business clients with office buildings in the area. Lynn decides to register a [.Doing Business As](DBA) with their State and Local government offices.
+
+It's important to note that this is not registering a legal business name. For example, 8fold's legal business name is 8fold, LLC (we'll get there). Mastering the Mundane is a DBA registered to 8fold.
+
+For Lynn, they will register the DBA and associate it to *their* legal name and social security number.
+
+Lynn should be able to go to their financial institution and have the DBA added to their account. If Lynn had not opened the separate account, this could become tricky and difficult to track. 
+
+- Who gets charged?
+	- Residents (and businesses) in the neighborhood.
+- Who gets paid?
+	- Lynn (any checks may be payable to Lynn or "Lynn's Lawn Care)
+- Who pays taxes?
+	- Lynn
+- Who gets sued?
+	- Lynn ("business" and personal assets): Lynn may also want to purchase liability insurance.
+- Who "owns" the business and assets?
+	- Lynn
+
+Lynn will need to re-register the DBA on a regular basis. This mitigates the risk of business names being registered to folks who are no longer operating under that name. Thereby making it available for someone else to register.
+
+## Single-member Limited Liability Company
+
+Lynn is continuing to grow and has decided to contract work out to another sole proprietor. Lynn would rather do this while operating as a legal business entity, so they converted their DBA to a single-member [.Limited Liability Company](LLC).
+
+This is a bit more expensive than what we've explored so far. However, an LLC is still quite flexible compared to other legal structures.
+
+Lynn registers the LLC with State and Local governments. Lynn also registers for an [[.Employer Identification Number](EIN)](https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online).
+
+Lynn can now convert (or open) a business account with their financial institution using the name of the registered company, with their name as an authorized user. This is the inverse compared to a DBA where Lynn is the account holder, who happens to be able to deposit money using the name of the DBA. With an LLC, the company name is the first name, and Lynn is an authorized person acting on its behalf.
+
+Lynn will also want to update any contracts with clients and service providers. The key here is that Lynn is no longer "Lynn DBA Lynn's Lawn Care"; instead, they are signing on behalf of "Lynn's Lawn Care." Specifically: Lynn's Lawn Care, Lynn X Manager.
+
+This helps keep Lynn, the person, separate from Lynn's Lawn Care, the company.
+
+- Who gets charged?
+	- Residents (and businesses) in the neighborhood.
+- Who gets paid?
+	- Lynn's Lawn Care (any checks made payable to Lynn may be considered personal revenue—think sole-proprietor)
+	- Lynn can get money from the LLC in multiple ways.
+- Who pays taxes?
+	- Lynn
+- Who gets sued?
+	- Lynn's Lawn Care (.
+- Who "owns" the business and assets?
+	- Lynn
+
+
+
+
+
+
+
+
+
+
+As an overview we will use the following major categories:[^1]
+
+- individual,
+- doing business as,
+- partnerships,
+- company, and 
+- corporation.
+
+|Structure                        |Paid in the name of     |Taxes paid by |Lawsuit target |Asset ownership      |
+|:--------------------------------|:-----------------------|:-------------|:--------------|:--------------------|
+|Individual                       |Your legal name         |You           |You            |You                  |
+|Individul doing business as      |DBA legal name          |You           |You            |You                  |
+|Partnerships                     |Legal name of partners  |Partners      |Company        |Company              |
+|Company                          |Company legal name      |Members       |Company        |Company              |
+|Corporation                      |Corporation legal name  |Corporation   |Corporation    |Corporation          |
+
+[.DBA](Doing business as) deserves a note here. Quick definition on what is meant by legal entity: has the legal capacity to enter into agreements or contracts, assume obligations, incur and pay debts, sue and be sued in its own right, and to be held responsible for its actions.[^2] You, as an individual are a legal entity. A partnership, company, and corporation are legal entities as well. A DBA, is basically an alias &mdash; an assumed name. Any legal entity can have a legally recognized assumed name, if registered; this includes non-persons.
+
+For example, let's say you have a few hobbies and are wanting to see if any one of them might work as a business. You create some type of craft goods, bake cookies, and do software development. The cost of starting all three as formal business could cost a fair amount of money with no guarantee of a short return on investment. You could start one business that does all three, but it could be difficult to name and might confuse potential customers. You could also register a company (an [.LLC](limited liability company), for example) called: J's Projects, llc. The cost of time and money may range from $100 to several thousand [.USD](United States Dollars), depending on how you go about it.
+
+Once the company is registered with various government agencies, you could then register multiple DBAs: J's Crafts, J's Cookies, J's Cool at Coding. The cost per DBA will typically be much less than a single company; less than $100 USD in some cases. This allows you to create a bank account in the name of J's Project, llc. &mdash; add the DBAs to that account &mdash; and receive payments in those names.
+
+Therefore, it could be argued that the cheapest (in time and money) way to appear to "be in business," would be to register a DBA for yourself as a person, have that added to your bank account, and ask people to "write check payable to X" where the "X" is your DBA a name. From legal- and tax-perspectives, you are still "just you," but from a customer's perspective you are not.
+
+From a legal liability perspective the difference between being an individual (or sole-proprieter) or any other legal business is who that legal entity is. In the case of you as an individual, it's you. You sign the contracts, you sue people, you get sued, you own the means of production, you pay taxes. In the case of the company, it's the company. The company enters contracts (by way of an authorized agent), the company sues and gets sued, the company owns the means of prodcution &mdash; the company may or may not pay taxes.
+
+When it comes to companies we say all non-individuals are companies, but not all companies are corporations. A company is what causes a legal separation between you and your assets, obligations, and so on and the assets, obligations, and so on of a legal entity separate from yourself. A corporation is what cases a tax separation between you and a legal entity seprate from yourself.
+
+With this in mind, you might be able to see a possible progression: individual, no DBA; individual, with DBA; company as or with DBA; corporation. It's not that any of these structures is inherently better or worse in all contexts; rather, it's about choosing the most appropriate given your context and what you're looking to accomplish.
+
+You, as an individual, take on all risk and responsibility. You, as part of company, typically have limited liability so long as you can maintain "[the corporate veil](https://en.wikipedia.org/wiki/Piercing_the_corporate_veil)" as more of a giant chasm. Maintaining the giant chasm is typically easier with a corporation because the corporation is also taxed by various levels of government.
+
+These are the two most common concerns people have around starting any form of entrepreneurship, legal and tax responsibility. A lot will make their selection based solely on the answers to these, which is fine. There are other things to consider though, such as:
+
+- What type of documents need to be filed?
+- Are meetings required for certain types of decisions?
+- Are certain meetings required on a recurring (monthly, annually, quarterly)?
+- Do meetings need to be kept for those meetings?
+- Is a board of directors required? If so, how many members do you need?
+- Will a registered agent be required? If so, can I do it or should I hire a service?
+
+This is the nuance detail we're not going to get into here, but they are questions to ask while researching what type of legal entity to form. In the meantime, you can get started as an individual with minimal friction.
+
+[^1]: [Small Business Association: Common Business Structures](https://www.sba.gov/business-guide/launch-your-business/choose-business-structure)
+[^2]: [Business Dictionary: definition of legal entity](http://www.businessdictionary.com/definition/legal-entity.html)

content-root/public/your-practice/meta.json

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+  "title": "Your Practice",
+  "created": "20200724",
+  "updated": "20240321"
+}