Determining an acupuncture business structure depends to some degree on your business model. Your acupuncture business model is how you practice acupuncture.
For example, you can practice acupuncture as a Solo Practitioner in your own office, as an Employee in a hospital, as a Partner with another acupuncturist, or as an Associate with a group of multi-specialty practitioners, among other possibilities.
Read more about the different kinds of Acupuncture Business Models.
The structure of your acupuncture business is the legal formation of your actual business. Your acupuncture business structure tells the state and federal governments how to tax you, and it offers various levels of legal protection. (And since we are talking about legal protection, be sure to read my Disclaimer, which explains why you need to take the following information with a grain of salt and take full responsibility for your personal business decisions. If that means consulting with a qualified accountant or attorney, then do it!)
There are many different kinds of business structures and ways to organize a business. I am only going to review the ones that are most commonly used by acupuncturists. For a more complete explanation of all the different ways to legally structure your acupuncture practice, go to the A-Z Index for Small Business at www.irs.gov.
The most common acupuncture business structures are:
Sole Proprietorship (SP): A Sole Proprietorship is the easiest and least expensive way to start your business. It is one of the the most common acupuncture business structures for new acupuncturists. As a Sole Proprietor, you are your business. There is no legal distinction between you and the acupuncture practice you own. In scary blunt terms, if someone sues you, everything you own (including your business assets and your home, car, property, and clothes on your back) are all fair game. If you are just starting out and do not have a lot of possessions to protect then this is a good way to organize your acupuncture business structure. You can always change later to an LLC or S-Corps (see below) as your circumstances change and your assets grow.
If you have a home, family, and other important valuables worth protecting, then you may want to consider a Limited Liability Corp.
"Doing Business As" (DBA): A DBA or "Fictitious Name" is exactly the same legally speaking as a Sole Proprietorship with the distinction that you have registered a business name, other than your own name (or another business name). For example, if I was a Sole Proprietor, I would be Lisa Hanfileti, DBA Points of Origin (my business name). Patients would then make payments to Points of Origin, not my personal name. You need to register your business name with the city and county in which you are practicing acupuncture. Every city and county has their own rules and fees, so you have to look them up.
The advantage of a DBA is you can open a bank account under your business name. This makes it much easier to track business income, expenses, and all your accounting transactions. You can often get good deals on low interest business credit cards as well. (But be careful to read the fine print. There's always a catch!)
As a DBA you are still a Sole Proprietor and do not have any legal protection for your assets and are personally liable.
Limited Liability Corporation (LLC): This is the next most common legal business formation.
Small Business Corporation (S-Corps):
Limited Partnership (LP) & Limited Liability Partnership (LLP):
Thinking through the type of acupuncture practice you want and your specific state's business requirements are important first steps to determining your acupuncture business structure.
Remember that it is easier to start simple with a SP and later (as your business and assets grow) change to a more complex and specialized structure like an LLC or S-Corp, than it is to start complex and change to an SP.