Minnesota Limited Partnership

Among the first decisions you should make as a new entrepreneur is determining what type of business system you will file as. Because you will likely be operating under the same structure for the rest of the journey of the business, finding out which type to file might be a tough decision. There are a wide range of assorted 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 much easier, below you will learn the major benefits of each type 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 advantages 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 system 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 company. One of the most essential things to be aware of is that you will be specifically 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 another person. For example, you might know the way 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 considerable benefits over partnerships. One of 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 for instance, the business secured a loan in order to pay for a new rig and was unfit 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 as being popular with many small business owners. A sub chapter S corporation is treated the same as a regular corporation in terms of limited liability. However, for tax purposes, you are treated similarly as a partnership. This helps to avoid 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 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, 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 much simpler to setup than corporations and have fewer regulatory requirements. In a limited liability partnership you are protected from the actions of these other parties. Simultaneously the business will be structured under the standards 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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