In thinking about operating a child care program, the first legal matter which must be decided is the questions of what type of organization should be used for the program. The business structure must match the legal needs and plans of the program, operators and clients. The decision about type of organization is the initial decision around which all other legal-related decisions will focus.

10 Lessons

The decision-makers must take several factors into consideration: 1) liability 2) compliance requirements and 3) taxes.  Much like the purchase of a car, the sales person typically inquires about the needs of the buyer.  Are you looking for power, speed, safety, control, simplicity, image or flexibility?  Are you thinking long term?  Are you looking to buy today and decide quickly?

Essentially, this decision requires that the decision-makers think about what type of organization is best for their specific program.  This requires matching the legally permitted types of organizations with the needs and plans of the organization.  There are four (4) major types of organizational structure which can be used for the operation of a private day care program.

  • Sole proprietorship
  • Partnership
  • Limited Liability Company
  • Corporation

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