Delaware Corporation Filing

One of the first arrangements you must make as a new entrepreneur is figuring out what sort of business system you will file as. Because you will likely be operating under the same structure for the rest of the life of the business, understanding which type to file could be a difficult decision. There are a wide range of varied state filings available for businesses nowadays. Be 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 easier, below you will uncover the major benefits of each type of state business filing.

If you do not mark your business with any other type 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 in addition to your personal income. However, this framework is not a separate legal entity from you as an individual, and so 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 specifically liable for the actions of your partners and employees. Several of the benefits of setting up a partnership include the ability to join resources and knowledge with another. For example, you might know 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 considerable 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 invest in 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 as being popular with many small business owners. A sub chapter S corporation is treated the same as a normal corporation in regards to limited liability. However, for tax purposes, you are treated equally 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 few 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 incorporate 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. Among the other benefits is that they are generally much easier to setup than corporations and have fewer regulatory criteria. In a limited liability partnership you are shielded 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 managing is very small and has no debt.

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