Sole proprietorships, partnerships, and corporations are the three most common categories of business entities in the United States. Many healthcare providers organize as corporations, but many private medical practices operate as sole proprietorships or partnerships. Each organizational structure has benefits, drawbacks, structures, setup processes, and taxation implications that healthcare entities must consider when deciding how to structure their business.
For each scenario, consider how you would proceed as a manager of this company. Be sure to include the following details to justify your thinking:
Do you agree with the organizational form chosen in each of these scenarios? Why or why not?
Which type of organizational form would you have chosen, and why?
If you were consulted for advice in each scenario, what questions would you ask to help these individuals make the best decision?
Use the following scenarios for your consideration:
Sonya is considering starting a practice in which she will be the sole orthodontist. She owns a home, and her top priority is making sure that she cannot lose her home because of a lawsuit. Her brother told her not to incorporate because it would be very expensive and would lead to more regulatory scrutiny. She chooses to operate as a sole proprietorship.
Bradley and Li Jing have been friends since the beginning of college. Bradley has a master’s degree in Nutrition Science, and Li Jing has a master’s degree in Exercise Therapy. They decide they should combine their skills and open their own wellness center. Upon graduation, they use a verbal agreement to enter into a limited partnership. Bradley’s girlfriend expresses that she opposes this idea because she wants to move back to her home state. Bradley tells her not to worry because it will be easy for him to sell his share of the organization if they choose to move in the future.
Your paper should be two pages in length (not including the required title and reference pages) and conform to the APA standards. Include at least two credible references