Rhode Island Heavy Highway Use Tax

Among the first choices you have to make as a new company is determining what kind of business structure you will file as. Because you will possibly be operating under the same structure for the rest of the existence of the business, knowing which type to file could be a complicated decision. There are a wide range of various state filings available for businesses nowadays. Make sure that you choose the file the correct one as it can make a huge difference for the financial future of both you and your business. To make your task easier, below you will uncover the major benefits of each variety 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 features 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 framework is not a separate legal entity from you as an individual, consequently you will be personally liable for any debts your business is subjected to.

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A partnership is where you and a minimum of another individual are joint owners in the enterprise. One of the most vital things to be aware of is that you will be personally liable for the actions of your partners and employees. Some of the benefits of starting a partnership include the ability to enlist resources and knowledge with someone else. For example, 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 notable 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 took out a loan in order to pay for a new rig and was not capable to meet the payments, your lender could not pursue you in person for the payment owed. Sub chapter S corporations are a pretty 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 normal corporation in terms of 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 accompanies 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. On the other hand 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 even 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 requirements. In a limited liability partnership you are sheltered from the actions of these other parties. At the same time 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 managing is very small and has no debt.

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