Alabama Limited Partnership

Among the first decisions you have to make as a new business owner is deciding 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 journey of the business, recognizing which type to file can be a challenging decision. There are a wide range of different state filings available for businesses these days. Make sure that you choose the file the appropriate 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 form 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 perks of sole proprietorships are they are easy to setup, have few filing requirements, and your business income is taxed along with your personal income. However, this structure 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 at least another individual are joint owners in the company. One of the most essential things to be familiar with is that you will be personally liable for the actions of your partners and employees. Several of the benefits of establishing a partnership include the ability to enlist resources and knowledge with another person. For instance, you might know the way to run a trucking company, but your partner might know how to access capital.

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Corporations have a number of substantial benefits over partnerships. 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 for example, the business obtained a loan in order to purchase a new rig and was unfit to meet the payments, your lender could not pursue you individually 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 normal corporation in terms of 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 extremely 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. Having said that a limited liability company can consist of a single owner, where case they are taxed as though they were a sole proprietorship. You can even have multiple owners for your limited liability company. Among 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. Simultaneously 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 running is very small and has no debt.

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