Minnesota Corporation Filing

One of the first selections you have to make as a new company is determining what form of business system you will file as. Because you will most likely be operating under the same structure for the rest of the journey of the business, determining which type to file could be a tough decision. There are a wide range of various state filings available for businesses nowadays. See to it that you choose the file the correct 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 find out the major benefits of each sort of state business filing.

If you do not designate your business with any other form of structure then it will be considered a sole proprietorship by the state. The main conveniences of sole proprietorships are they are straightforward to setup, have few filing requirements, and your business income is taxed along with your personal income. However, this structure is not a separate legal entity from you as an individual, so you will be personally liable for any debts your business accumulates.

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A partnership is where you and a minimum of another individual are joint owners in the company. Among the most vital things to be familiar with is that you will be directly liable for the actions of your partners and employees. Some of the benefits of starting a partnership include the ability to join resources and knowledge with another. For instance, you might know how to run a trucking company, but your partner might know the best way 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 separate legal entity from you as an individual. If as an example, the business took out a loan in order to invest in a new rig and was unable to meet the payments, your lender could not pursue you personally for the payment owed. Sub chapter S corporations are a relatively 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 regards to 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 include a single owner, whereby case they are taxed as though they were a sole proprietorship. You can even have multiple owners for your limited liability company. Just one of the other benefits is that they are generally 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. At the same time 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 running is very small and has no debt.

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