Alabama Limited Partnership Agreement

One of the first arrangements you have to make as a new entrepreneur is deciding what kind of business framework you will file as. Because you will probably be operating under the same structure for the rest of the journey of the business, knowing which type to file could be a challenging decision. There are a wide range of varied state filings available for businesses these days. See to it that you choose the file the right one as it can make a huge difference for the financial future of both you and your business. To make your task simpler, below you will learn the major benefits of each type of state business filing.

If you do not allocate your business with any other kind of structure then it will be considered a sole proprietorship by the state. The main advantages of sole proprietorships are they are easy to setup, have few filing requirements, and your business income is taxed in addition to your personal income. However, this construction 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 one other individual are joint owners in the establishment. One of the most vital things to be familiar with is that you will be directly liable for the actions of your partners and employees. A few of the benefits of starting a partnership include the ability to enlist resources and knowledge with another. For instance, you might know how to run a trucking company, but your partner might know how to access capital.

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Corporations have a lot of important benefits over partnerships. The most important of these is limited liability. What limited liability means is that the corporation is a completely independent legal entity from you as an individual. If for example, the business secured a loan in order to pay for a new rig and was unable to meet the payments, your lender could not pursue you in person for the payment owed. Sub chapter S corporations are a relatively new form of business structure that has proved to be 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 equally as a partnership. This helps to avoid the problem of double taxation which occurs with standard corporations.

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Limited liability companies are extremely flexible form of business structures available. While limited liability companies do share a few of the same features, as corporations they stand out. Like a corporation, they offer limited liability protection. Having said that 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 easier to setup than corporations and have fewer regulatory criteria. In a limited liability partnership you are sheltered from the actions of these other parties. Additionally the business will be structured under the regulations of normal partnership. This is generally a better choice than a standard partnership unless the business you are managing is very small and has no debt.

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