Michigan Limited Partnership

One of the first selections you should make as a new business owner is figuring out what variety of business structure you will file as. Because you will probably be operating under the same structure for the rest of the life of the business, finding out which type to file might be a tough decision. There are a wide range of varied state filings available for businesses nowadays. Ensure that you choose the file the ideal one as it can make a huge difference for the financial future of both you and your business. To make your task less troublesome, below you will find out the major benefits of each form of state business filing.

If you do not mark 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 convenient to setup, have few filing requirements, and your business income is taxed together with your personal income. However, this framework is not a separate legal entity from you as an individual, so you will be personally liable for any debts your business acquires.

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

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Corporations have a number of significant benefits over partnerships. One of the most important of these is limited liability. What limited liability means is that the corporation is a completely separate legal entity from you as an individual. If as an example, the business obtained a loan in order to pay for a new rig and was unable 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 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 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 one of the most flexible form of business structures available. While limited liability companies do share several of the same features, as corporations they stand out. Like a corporation, they offer limited liability protection. However a limited liability company can incorporate a single owner, whereby case they are taxed as if they were a sole proprietorship. You can additionally 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 prerequisites. In a limited liability partnership you are safeguarded from the actions of these other parties. Additionally the business will be structured under the rules 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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