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Arizona Limited Partnership Agreement

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Among the first decisions you need to make as a new business owner is deciding what sort of business framework you will file as. Because you will most likely 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 nowadays. See to it that you choose the file the right one as it can make a huge difference for the financial future of both you and your business. To make your task much easier, below you will find out the major benefits of each form of state business filing.

If you do not allocate your business with any other type 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 together with your personal income. However, this structure is not a separate legal entity from you as an individual, consequently you will be personally liable for any debts your business acquires.

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A partnership is where you and a minimum of another individual are joint owners in the business. Among the most important 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 establishing a partnership include the ability to join resources and knowledge with someone else. For example, you might know tips on how to run a trucking company, but your partner might know the best way to access capital.

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Corporations have a number of notable benefits over partnerships. The most important of these is limited liability. What limited liability means is that the corporation is a completely independent legal entity from you as an individual. If for instance, the business took out 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 pretty 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 the most flexible form of business structures available. While limited liability companies do share a couple of the same features, as corporations they stand out. Like a corporation, they offer limited liability protection. However a limited liability company can contain a single owner, where case they are taxed as if 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 less complicated to setup than corporations and have fewer regulatory demands. In a limited liability partnership you are protected from the actions of these other parties. At the same time the business will be structured under the regulations 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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