Massachusetts Corporation Filings

Among the first decisions you should make as a new business owner is determining what sort of business structure 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 may be a challenging decision. There are a wide range of varied state filings available for businesses nowadays. Ensure 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 much easier, below you will learn the major benefits of each form of state business filing.

If you do not allocate your business with any other type of structure then it will be considered a sole proprietorship by the state. The main benefits 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 construction 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 enterprise. Among the most vital things to be familiar with is that you will be personally liable for the actions of your partners and employees. A few of the benefits of establishing a partnership include the ability to join resources and knowledge with someone else. As an example, you might know the way to run a trucking company, but your partner might know the way to access capital.

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Corporations have a lot of notable benefits over partnerships. One of 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 for example, the business took out a loan in order to buy 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 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 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 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 are distinct. Like a corporation, they offer limited liability protection. On the other hand a limited liability company can incorporate a single owner, in which case they are taxed as if they were a sole proprietorship. You can also 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 conditions. 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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