Question

Scenario #1 An occupational therapist had been working for five years in a rehabilitation unit of a local hospital. The therapist was developing a specialty for treating individuals with neuromuscular disorders, traumatic brain injury, and stroke. The therapist decided to leave the hospital job, start a business working by herself, and name it Rehabilitation Works. The therapist planned to specialize in providing services to clients to develop skills required for daily living. Examples of therapeutic activities to be offered included: physical conditioning, planning and organization, self care, meal preparation, household management, money management, communication and social skills. The therapist decided to rent space in an existing clinical facility before purchasing a building because she will be working alone and does not need too much space. 1. What type of business structure would you recommend for this single occupational therapist? WHY? 2. What type of tax structure? (Profit or Nonprofit) WHY?

Answer 1

In the case presented, I would recommend the sole proprietorship business structure as she is owning the business individually and she is also managing it herself. It is stated in many types of research that of the operations of a business is managed single headedly then the most suitable business structure is Sole proprietorship. This type of structure can be developed and managed quite easily and one can take free decisions.

The tax structure which can be used is FOR PROFIT as the business is being developed for the personal benefits and gains. The other reason is that only corporations can have the tax structure as Non-Profit.