Hawaii Limited Partnership

Among the first decisions you must make as a new entrepreneur is determining what type of business system you will file as. Because you will most likely be operating under the same structure for the rest of the life of the business, recognizing which type to file may be a tough decision. There are a wide range of different 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 learn the major benefits of each type of state business filing.

If you do not designate your business with any other form 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 together with 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 accumulates.

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A partnership is where you and at least another individual are joint owners in the establishment. Among the most significant things to be aware of is that you will be specifically liable for the actions of your partners and employees. A few of the benefits of starting a partnership include the ability to join resources and knowledge with someone else. As an example, you might know the best ways to run a trucking company, but your partner might know how to access capital.

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Corporations have a lot 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 as an example, the business applied for a loan in order to pay for a new rig and was unable to meet the payments, your lender could not pursue you directly for the payment owed. Sub chapter S corporations are a reasonably 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 typical corporation in regards to limited liability. However, for tax purposes, you are treated similarly 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 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 consist of a single owner, in which case they are taxed as though they were a sole proprietorship. You can also have multiple owners for your limited liability company. Just 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 shielded from the actions of these other parties. At the same time 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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