Michigan LLC Filing

Among the first arrangements you should make as a new company is deciding what sort of business system you will file as. Because you will possibly be operating under the same structure for the rest of the existence of the business, recognizing which type to file may be a difficult decision. There are a wide range of different 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 simpler, below you will uncover the major benefits of each type of state business filing.

If you do not designate your business with any other type of structure then it will be considered a sole proprietorship by the state. The main conveniences of sole proprietorships are they are convenient 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, therefore you will be personally liable for any debts your business is subjected to.

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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 aware of is that you will be individually liable for the actions of your partners and employees. Some of the benefits of creating a partnership include the ability to enlist resources and knowledge with another person. For instance, you might know tips on how to run a trucking company, but your partner might know the best way to access capital.

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Corporations have a lot of substantial 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 instance, the business obtained a loan in order to invest in 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 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 standard corporation in terms of limited liability. However, for tax purposes, you are treated in the same way as a partnership. This helps to prevent 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 number 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, in which case they are taxed as though they were a sole proprietorship. You can additionally have multiple owners for your limited liability company. Among the other benefits is that they are generally much simpler to setup than corporations and have fewer regulatory requirements. In a limited liability partnership you are safeguarded from the actions of these other parties. At the same time 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 running is very small and has no debt.

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