Colorado Corporate Filings

One of the first selections you will need to make as a new business owner is deciding what sort of business structure you will file as. Because you will likely be operating under the same structure for the rest of the journey of the business, understanding which type to file could be a tough decision. There are a wide range of varied state filings available for businesses these days. Ensure 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 find out the major benefits of each variety of state business filing.

If you do not define your business with any other type of structure then it will be considered a sole proprietorship by the state. The main advantages of sole proprietorships are they are simple to setup, have few filing requirements, and your business income is taxed in addition to your personal income. However, this framework is not a separate legal entity from you as an individual, therefore you will be personally liable for any debts your business accumulates.

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A partnership is where you and a minimum of another individual are joint owners in the establishment. Among the most vital things to be familiar with is that you will be specifically 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. As an example, you might know the best ways 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 substantial 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 as an example, the business secured a loan in order to purchase a new rig and was unfit to meet the payments, your lender could not pursue you directly 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 terms of limited liability. However, for tax purposes, you are treated similarly as a partnership. This helps to prevent 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 number of the same features, as corporations they are distinct. Like a corporation, they offer limited liability protection. Nonetheless 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. 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 shielded 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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