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There are many different types of business structures. There is also a lot of confusion over which one is best — particularly for those of us in the hoof-care business.
There are basically two types of one-owner business structures: A sole proprietorship (SP) and a limited liability company (LLC).
Let’s look at the differences, as well as the basic pros and cons for both of these structures in order to help you understand and choose the best business structure for your farrier business.
An SP is the most common form of business structure, as well as the one most often used by farriers. An SP is a business that is owned by one individual or a married couple.
Many small businesses begin as sole proprietorships and, after operating for a period of time, change their business to a more complex organizational form. There is no requirement that forces a sole proprietor to make this change; it is a matter of preference based on numerous factors.
To form an SP, all you have to do is offer goods or services for sale. No government formation filings are required to form an SP.
If you plan to operate under a fictitious name such as “Pain-Free Farrier Services,” you are required to register your fictitious business name, or DBA (Doing Business As), with your county and pay a small filing fee. If you plan to operate under your own surname such as Esco Buff’s Farrier Service or Buff’s Farrier Services, you…