Colorado Limited Partnership

One of the first choices you should make as a new company is determining what form of business system you will file as. Because you will probably be operating under the same structure for the rest of the life of the business, determining which type to file can be a tough decision. There are a wide range of various state filings available for businesses these days. Make sure 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 less complicated, below you will uncover the major benefits of each type of state business filing.

If you do not define 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 convenient to setup, have few filing requirements, and your business income is taxed in addition to your personal income. However, this system is not a separate legal entity from you as an individual, therefore you will be personally liable for any debts your business accumulates.

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A partnership is where you and at least another individual are joint owners in the enterprise. Among the most vital things to be familiar with is that you will be specifically liable for the actions of your partners and employees. Some of the benefits of creating a partnership include the ability to enlist resources and knowledge with someone else. For instance, you might know how to run a trucking company, but your partner might know the way to access capital.

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Corporations have a lot of important 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 as an example, the business secured a loan in order to purchase 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 fairly 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 regards to limited liability. However, for tax purposes, you are treated similarly as a partnership. This helps to prevent the problem of double taxation which accompanies standard corporations.

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Limited liability companies are one of the most flexible form of business structures available. While limited liability companies do share a few of the same features, as corporations they are distinct. Like a corporation, they offer limited liability protection. Nonetheless a limited liability company can incorporate a single owner, in which case they are taxed as though they were a sole proprietorship. You can even 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 conditions. In a limited liability partnership you are protected 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 operating is very small and has no debt.

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