April 30, 2013
Today's Guest Blog Post is by Rob Turner. Rob is a partner at Intown Law as well as a very supportive husband of a doula. YourDoulaBag is excited to work with Rob in setting up the Business Foundation Package.
In plain language: you have more protection when you operate your doula services through a business entity.
As your doula business advocate, we strongly encourage you to consider setting up a legal shield (in the form of an entity) to limit yours and your family’s personal/financial liability in the event of dispute. Common forms of entities include limited liability companies (LLCs) and corporations.
Many doulas operate their doula services business as a “sole proprietor.” A sole proprietor is where you are conducting business as yourself and without operating your services through an entity. For example: think of Bill Gates selling software services by himself and not through an entity; instead, he and others formed Microsoft Corporation to operate and sell their services. Now if a customer is unhappy with their software and sues, Bill Gates won't lose his boat!
Operating any kind of business, including a doula services business, through a legal entity provides the business owners legal protection. If all of the required formalities are followed, the company’s owners’ maximum financial exposure would be the amount of their investment in the company.
In today’s litigious society (people love to sue!), many times the person filing a lawsuit (called the plaintiff) will sue all parties involved in the “wrong” that has occurred to them – seeking to recover monetary payments from them (called damages). We hope you are never involved in this situation, but it is not difficult to imagine complications arising from the birth (through no fault of your own), the parents being extremely dissatisfied with the outcome, and the parents suing all parties involved with the baby’s delivery – care providers, nurses, hospital – and doula. In this example, if you are operating your doula business through an entity rather than as a sole proprietor you will have a greatly enhanced limitation on your personal liability. From the example above, you are less likely to lose your boat!
Need assistance with your business formation or doula contracts? Take a look at the Business Foundation Package.
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