IRS 2290 Services

Among the first arrangements you have to make as a new company is determining what form of business system you will file as. Because you will probably be operating under the same structure for the rest of the life of the business, recognizing which type to file could be a complicated decision. There are a wide range of assorted state filings available for businesses nowadays. Make sure that you choose the file the correct one as it can make a huge difference for the financial future of both you and your business. To make your task less troublesome, below you will learn the major benefits of each form of state business filing.

If you do not mark your business with any other kind 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 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 acquires.

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A partnership is where you and at least one other individual are joint owners in the establishment. Among the most important things to be aware of is that you will be directly 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 best ways to run a trucking company, but your partner might know how 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 separate 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 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 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 couple of the same features, as corporations they are distinct. Like a corporation, they offer limited liability protection. That being said a limited liability company can contain a single owner, in which case they are taxed as though 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 criteria. In a limited liability partnership you are sheltered from the actions of these other parties. Additionally the business will be structured under the standards 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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