Maryland Corporation Filings

Among the first choices you have to make as a new entrepreneur is determining what type of business framework you will file as. Because you will probably be operating under the same structure for the rest of the journey of the business, determining which type to file might be a tough decision. There are a wide range of assorted state filings available for businesses these days. See to it that you choose the file the best 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 uncover the major benefits of each type of state business filing.

If you do not allocate 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 structure is not a separate legal entity from you as an individual, consequently 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 one other individual are joint owners in the establishment. Among the most important things to be aware of is that you will be individually liable for the actions of your partners and employees. Several of the benefits of arranging a partnership include the ability to enlist resources and knowledge with someone else. For instance, you might know tips on how to run a trucking company, but your partner might know how 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 example, the business applied for a loan in order to invest in a new rig and was unfit to meet the payments, your lender could not pursue you individually for the payment owed. Sub chapter S corporations are a fairly 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 regular corporation in terms of limited liability. However, for tax purposes, you are treated equally as a partnership. This helps to prevent the problem of double taxation which accompanies standard corporations.

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Limited liability companies are extremely flexible form of business structures available. While limited liability companies do share several of the same features, as corporations they stand out. Like a corporation, they offer limited liability protection. Having said that a limited liability company can incorporate a single owner, where 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 much simpler to setup than corporations and have fewer regulatory prerequisites. In a limited liability partnership you are protected 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 managing is very small and has no debt.

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