Michigan Limited Liability Limited Partnership

Among the first selections you will need to make as a new entrepreneur is figuring out what form of business system you will file as. Because you will possibly be operating under the same structure for the rest of the life of the business, determining which type to file might be a tough decision. There are a wide range of varied state filings available for businesses these days. 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 less complicated, below you will uncover the major benefits of each type of state business filing.

If you do not assign your business with any other form of structure then it will be considered a sole proprietorship by the state. The main perks of sole proprietorships are they are easy to setup, have few filing requirements, and your business income is taxed together with 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 accumulates.

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A partnership is where you and at least another individual are joint owners in the company. One of the most vital things to be aware of is that you will be personally liable for the actions of your partners and employees. Several of the benefits of creating a partnership include the ability to enlist resources and knowledge with another. 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 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 distinct legal entity from you as an individual. If as an example, the business took out a loan in order to purchase a new rig and was unable to meet the payments, your lender could not pursue you individually 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 extremely flexible form of business structures available. While limited liability companies do share some of the same features, as corporations they are distinct. Like a corporation, they offer limited liability protection. Nonetheless a limited liability company can include a single owner, in which case they are taxed as though 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 criteria. In a limited liability partnership you are protected from the actions of these other parties. Simultaneously the business will be structured under the regulations 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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