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Business Structure

All of this varies based on the laws and available business structures where you live. But I wanted to include a brief overview of the 2 common confusions that are common to most countries. Please use this as general education, then speak to an accountant or business advisor in your local area.

Employees vs Contractors

This is a big debate among music school owners. Should your teachers be employees or contractors? 

The basic difference between these in most countries is that you organise and pay taxes for an employee while a contractor handles their own. You also may need to pay for certain insurances and provide holiday and sick leave for employees, depending on laws in your area.

All of this makes it sound like contractors are the simpler option. But here’s the thing: This is not a choice.

You don’t get to decide to hire employees or keep them as contractors. There are certain criteria that determine which category they fall into. 

These criteria may be murky enough that you could argue one way or the other. But in most cases, your teachers probably count as employees. 

Again, speak to your accountant or seek other professional advice. 

Companies vs Sole Traders

Now we get to an area that has even more variation between different countries: your business structure. If you’ve already started a company (LLC or ltd or similar) then you’re probably good to go.

If, however, you’re currently operating as a sole trader or sole proprietorship, you may need to consider establishing a company. Check with an accountant or tax professional to see what makes sense where you live.

Insurance

I would highly recommend liability insurance at a minimum to cover you if someone injures themselves on your property. You should make sure that this covers your other teachers even if you’re not present. 

Studio Premises

If you already have a studio space in a commercial location, you’re most likely set here. But if you currently run your studio from your home and intend to have the other teachers work from there too, this is something to look into. Local laws around this are wildly varied so check with your government, local council or homeowners’ association.

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