Why Your Business Structure Matters When Hiring Remote VAs 

More and more companies are turning to remote virtual assistants (VAs) to help manage their workload. This is because a lot of eligible workers prefer to work remotely. A study even predicted that 22% of American workers will be remote in 2025. (1)

But before you jump on the VA bandwagon, there’s something important you need to consider: your business structure. You might wonder, “What does my business structure have to do with hiring a VA?” Here’s why:

To Adhere to Legal and Tax Implications   

First things first, let’s talk about the legal and tax side of things. Different business types come with their own set of legal structures when it comes to hiring workers, including remote VAs. For instance, if you’re running your business as a sole proprietorship, you’re personally responsible for all aspects of your business, including taxes on your VA’s wages.

Meanwhile, having established a Limited Liability Company, LLC, or corporation, the business becomes an entity apart from its founders. For example, if you start an LLC in the state of New Jersey and hire a remote VA, that will mean something different in terms of tax implications and more paperwork. Added to that are the differing tax nuances for each state or country—especially if the VA you’ll hire is from another area or overseas.

So, what’s the key takeaway? As a business owner, understand the legal and tax implications of hiring a VA based on your current structure. It could save you from headaches (and potentially hefty fines).    

To Determine Employee or Contractor Status   

Your business structure also plays a pivotal role in determining whether your virtual assistant (VA) is classified as an employee or an independent contractor. This might sound like a small detail, but it’s a big deal.    

You might classify your VA as an employee if your business is structured as a corporation. You must handle payroll taxes, provide benefits, and follow employment laws. On the flip side, sole proprietorships and partnerships often work with virtual assistant contract workers, which comes with its own set of rules and responsibilities.    

Getting this classification wrong can lead to serious consequences, including penalties from the IRS. So, look closely at how your business operates; your business structure will guide you toward the correct classification.

To Navigate International Hiring   

It’s not uncommon to hire VAs from different countries these days. But did you know that your business structure can affect how you navigate international hiring?    

Corporations often have more resources and established processes for dealing with international hiring regulations. They might find it easier to comply with different countries’ employment laws and tax requirements. Smaller structures like sole proprietorships, on the other hand, might find international hiring more challenging due to limited resources and expertise.    

If you’re planning to hire a virtual assistant from around the world, ensure your business structure is set up to handle the complexities of international employment.    

To Scale Your Team Effectively   

Scaling is challenging for both growing and small businesses. So hard that only 22% of businesses launched in the last decade have managed to scale and thrive. You don’t want the same thing to happen to your company. (2)

What’s more challenging is that when you hire remote VAs and expand your team, this growth could likely be another roadblock. Your business structure will now determine how challenging scaling will be.    

Some structures, like corporations, are designed with scalability in mind. They often have more formal processes and hierarchies that can accommodate a growing workforce. Sole proprietorships, while more straightforward to manage initially, might struggle to keep up as the team expands.    

Consider your long-term goals when choosing a business structure. If you see a future with a large team of remote VAs, you might want to opt for a structure that makes scaling up smoother.   

To Ensure Accurate Financial Reporting   

Indeed, a remote VA hire does save your company money. A recent survey even showed that hiring these virtual assistants led to a jaw-dropping reduction of 78% in business expenses. However, this does not mean that managing business finances is easy as your team grows, and the management structure you have in place regarding business structure can sometimes dictate how you manage things. (3)  

While more complex systems may be installed in a corporation, they could make it easier to manage the payroll for many VAs and expenses. Sole proprietorships and partnerships tend to make it even harder to separate personal finances from business ones, especially when working remotely.  

Your business structure affects how you track expenses, manage payroll, and report income related to your VAs. So, choose a structure that aligns with your financial management capabilities and goals.     

To Formalize Your Relationship   

Last but not least, let’s talk about contracts. The agreements you make with your hired virtual assistant are crucial, and guess what? Your business structure can influence these, too.    

A business entity may have different standard practices regarding contracts. Corporations might have more formal, comprehensive contracts, while sole proprietorships might opt for more straightforward agreements.  

The type of contract you use can affect everything from work expectations to intellectual property rights. Ensure your business structure allows you to create the working relationships you want with your VAs.    

Wrapping Up: Why Your Business Structure Matters When Hiring Remote VAs  

As you can see, your business structure is crucial when hiring remote workers and partnering with virtual assistant services. It affects everything from legal issues to scalability. So, before building your remote team, assess if your structure aligns with your goals and offers the flexibility you need. If not, consider making changes.    

Remember, the right structure depends on your needs, so consult professionals. When you set a strong foundation, you’ll be better prepared to manage remote work challenges and grow your business successfully. 

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