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"Life is trouble; only death is not," comments Zorba the Greek in the novel by Nikos Katzanzakis. I've heard many a business owner brag about the lack of complication that their sole proprietor status affords them. No messy ownership agreements, no separate

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

filings or taxes, complete freedom and flexibility to do what you want when you want. And if it's "just me" working as a contractor/consultant to other companies, why get so involved in structure and meeting minutes?

Well, it's a law of nature and balance that for

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

every yin, there's a yang; every action breeds a reaction; every silver lining has a cloud. And the "clouds" hanging over a sole proprietor can create a deluge of catastrophic proportions.

Cloud #1: You risk the whole ball of wax.

One of the ben

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

fits of doing business as a limited liability entity (such as a corporation or limited liability company) is that the structure (that's so unwieldy to the sole proprietor) acts as a protective fortress against personal liability. Sole proprietors don't have that shi

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

ld of protection. As a result, all of their personal assets are at risk in the event of a lawsuit or judgment. Personal assets, like your home, bank accounts, savings, car, jewelry (which can be sold to pay off a judgment). How remote is a judgment against you? For

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

he computer consultant whose network configuration inadvertently crashes the server? The graphic designer whose design may have infringed on someone else's? The independent sales rep accused of misusing a company contact list? The marketing consultant whose plan did

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

not produce the promised results? In a suit-happy society, sole proprietors often don't have the "war chest" to fund a lawsuit--or pay off a judgment. So why put Grandma's engagement ring, or your life savings, at risk? It's like jumping into a pool of hungry sharks

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

: you may not get eaten, but why would you want to put yourself in that danger in the first place?

Cloud #2: A house of cards crumbles easily.

Erratic economies, slow- (or non-) paying clients, or lawsuit judgments noted in Cloud #1 can all contri

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

ute to the demise of a business. Limited liability entities have the option to take the business through a bankruptcy proceeding, without it having to affect the business owners. But with sole proprietors, the business is the owner. The two are inseparable--nay, ide

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

tical. Therefore, harm to the business equals harm to the sole proprietor. If a sole proprietor is seeking a way out through bankruptcy, she must declare personal bankruptcy. Bankruptcies can stay on your credit record for 10 years and even longer, so the fresh star

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

that the bankruptcy process is supposed to provide may turn into a millstone around your neck... for over a decade.

Cloud #3: You may lose business opportunities.

Larger companies like to use independent contractors because they do not have to pa

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

Social Security and Medicare taxes on their behalf. Yet, consulting assignments, although temporary positions, can last for months or even years! If that happens, a consultant/contractor could look dangerously like a part time (or even full-time) employee. As a res

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

lt, an increasing number of companies will only do business with consultants who operate their businesses as limited liability entities, for the limited liability form lends a certain presumption that the business truly is independent. Is this form over substance? N

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

t if sole proprietors are missing out on attracting larger and more prosperous clients.

Cloud #4: You curtail business expansion opportunities.

One of the most significant ways for a small business to expand is to bring in other business owners be

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

cause they can contribute capital, contacts, and cheap labor. But you cannot have more than one owner in a sole proprietorship: by definition, it's "just you." Therefore, bringing in a business owner essentially means that you must create a new business... literally

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

as a new entity will have to be established. However, if you already have a limited liability entity, you can control who joins you and on what terms. In short, it can remain your business, only bigger and better.

Cloud #5: You risk thinking small.
ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust
g>

There's no law that says your have to want to be a millionaire if you go into business for yourself. You may be quite content with remaining a one-person operation. But just as putting on a suit to go to that important client meeting (or special date) makes you
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
eel and act differently, so too can having a limited liability entity help formalize your thinking and enable you to run the business smoothly, instead of running from pillar to post. There's a lot to know about running a business well--much of which has to do with
.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
nderstanding financial statements and what makes your business profitable. For the same 168 hours per week, wouldn't you rather make more money than less?

As you can see, there are lots of significant factors that can cloud the life of a sole proprietor. But you al
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip
o have options to hedge against their risks. Don't make this decision alone--be smart and find the right people (such as a small business attorney and accountant.) to help you. Avoiding sole proprietorship may be just the smart move to bring your business to Cloud 9

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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E-Folder - The Top 5 Reasons to Avoid Sole Proprietorship

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