Alabama Corporation Filings

One of the first choices you must make as a new entrepreneur is figuring out what variety of business framework you will file as. Because you will likely be operating under the same structure for the rest of the existence of the business, finding out which type to file may be a difficult decision. There are a wide range of different state filings available for businesses these days. See to it that you choose the file the best one as it can make a huge difference for the financial future of both you and your business. To make your task much easier, below you will find out the major benefits of each form of state business filing.

If you do not allocate your business with any other type of structure then it will be considered a sole proprietorship by the state. The main conveniences of sole proprietorships are they are simple to setup, have few filing requirements, and your business income is taxed along with your personal income. However, this structure is not a separate legal entity from you as an individual, therefore you will be personally liable for any debts your business acquires.

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A partnership is where you and a minimum of another individual are joint owners in the establishment. One of the most significant things to be familiar with is that you will be personally liable for the actions of your partners and employees. Some of the benefits of setting up a partnership include the ability to join resources and knowledge with another. As an example, you might know the way to run a trucking company, but your partner might know the best way to access capital.

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Corporations have a number of considerable benefits over partnerships. One of the most important of these is limited liability. What limited liability means is that the corporation is a completely distinct legal entity from you as an individual. If for instance, the business applied for a loan in order to invest in a new rig and was not capable to meet the payments, your lender could not pursue you individually for the payment owed. Sub chapter S corporations are a reasonably new form of business structure that has proved as being popular with many small business owners. A sub chapter S corporation is treated the same as a regular corporation in terms of limited liability. However, for tax purposes, you are treated in the same way as a partnership. This helps to stay clear of the problem of double taxation which occurs with standard corporations.

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Limited liability companies are the most flexible form of business structures available. While limited liability companies do share some of the same features, as corporations they stand out. Like a corporation, they offer limited liability protection. That being said a limited liability company can incorporate a single owner, in which case they are taxed as if they were a sole proprietorship. You can also have multiple owners for your limited liability company. One of the other benefits is that they are generally much simpler to setup than corporations and have fewer regulatory conditions. In a limited liability partnership you are safeguarded from the actions of these other parties. Simultaneously the business will be structured under the standards of normal partnership. This is generally a better choice than a standard partnership unless the business you are administering is very small and has no debt.

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