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Among the first selections you should make as a new entrepreneur is determining what form of business system you will file as. Because you will possibly be operating under the same structure for the rest of the journey of the business, recognizing which type to file can be a tough decision. There are a wide range of varied state filings available for businesses nowadays. Be 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 complicated, below you will find out the major benefits of each variety of state business filing.

If you do not assign your business with any other kind of structure then it will be considered a sole proprietorship by the state. The main features of sole proprietorships are they are convenient to setup, have few filing requirements, and your business income is taxed alongside your personal income. However, this system is not a separate legal entity from you as an individual, and so you will be personally liable for any debts your business accumulates.

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A partnership is where you and at least one other individual are joint owners in the company. Among the most essential things to be familiar with is that you will be directly liable for the actions of your partners and employees. Some of the benefits of setting up a partnership include the ability to enlist resources and knowledge with another person. For instance, you might know the way 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. 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 pay for a new rig and was unfit to meet the payments, your lender could not pursue you personally 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 standard 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 extremely 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. That being said 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. Just one of the other benefits is that they are generally much 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. At the same time 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 administering is very small and has no debt.

We Provide Company Filing Services to all Fifty States

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