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Massachusetts Limited Liability Limited Partnership

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One of the first decisions you should make as a new entrepreneur is deciding what type of business framework you will file as. Because you will probably 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 various state filings available for businesses nowadays. Make sure that you choose the file the ideal 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 uncover the major benefits of each variety of state business filing.

If you do not appoint your business with any other kind 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 together with your personal income. However, this construction is not a separate legal entity from you as an individual, so you will be personally liable for any debts your business incurs.

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A partnership is where you and a minimum of one other individual are joint owners in the business. One of the most significant things to be familiar with is that you will be specifically liable for the actions of your partners and employees. Several of the benefits of creating a partnership include the ability to join resources and knowledge with another. For example, 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 important 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 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 directly for the payment owed. Sub chapter S corporations are a relatively 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 terms of limited liability. However, for tax purposes, you are treated similarly as a partnership. This helps to prevent the problem of double taxation which accompanies standard corporations.

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Limited liability companies are one of the most 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. However a limited liability company can include a single owner, where 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 easier to setup than corporations and have fewer regulatory demands. In a limited liability partnership you are sheltered from the actions of these other parties. Additionally the business will be structured under the guidelines 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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