Choosing Your Business Structure When You're Self-Employed With a Disability

One of the most frequently asked questions we receive from individuals who are SSI/Medicaid recipients and starting their own business is, “Which business structure is right for me?”

Naturally, there is no black and white answer. Our response is: it depends.

We take many things into consideration when making this determination. For instance, we review the type of public benefits you are receiving, and consider your future needs regarding public benefits and ultimate objective. In establishing this business, is your objective to protect yourself from personal liability if the business is sued, or is your objective to have business assets excluded as countable resources so you will not become ineligible to receive SSI or Medicaid?

If you have other objectives, what are they? Here we will only focus on the two most common scenarios. If your objective is to protect yourself from personal liability if the business is sued, for Florida residents and residents in many other states throughout the country, a Limited Liability Company (LLC) will provide you with the protection you seek. In Florida, however, to receive the maximum protection from an LLC structure, it is required to be a multi-member LLC rather than a single member LLC. When you establish your business as an LLC the business assumes the liability and it protects you, the business owner, from having your personal assets attacked as a result of a business related lawsuit. Unfortunately however, your ownership interest in the LLC would be counted as a resource for SSI eligibility purposes.

If on the other hand your objective is to have business assets excluded as countable resources so you will not become ineligible to receive SSI or Medicaid under a wonderful provision provided by the Social Security Administration called PESS, then you would need to be structured as either a sole proprietorship or a simple partnership.

We recommend that you work closely with a benefits counselor when you are starting your business, and especially when making a determination about your business structure.

Image Credits: Boaz & Minerva Santiago

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