California Corporate Filing

One of the first choices you should make as a new entrepreneur is deciding what variety of business structure you will file as. Because you will probably be operating under the same structure for the rest of the journey of the business, finding out which type to file might be a challenging decision. There are a wide range of assorted state filings available for businesses these days. Make sure 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 simpler, below you will find out the major benefits of each type of state business filing.

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

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A partnership is where you and at least one other individual are joint owners in the company. Among the most important 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 arranging a partnership include the ability to join resources and knowledge with someone else. For instance, 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 lot of important 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 for instance, the business secured 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 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 equally as a partnership. This helps to avoid 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 some of the same features, as corporations they stand out. Like a corporation, they offer limited liability protection. Nonetheless a limited liability company can include a single owner, where case they are taxed as though they were a sole proprietorship. You can also 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 requirements. In a limited liability partnership you are sheltered from the actions of these other parties. Simultaneously 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 running is very small and has no debt.

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