New Mexico IRS Form 2290

One of the first choices you should make as a new business owner is deciding what sort of business framework you will file as. Because you will likely be operating under the same structure for the rest of the existence of the business, understanding which type to file may be a complicated decision. There are a wide range of assorted state filings available for businesses these days. Be sure 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 less troublesome, below you will find out the major benefits of each variety of state business filing.

If you do not mark 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 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 incurs.

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A partnership is where you and a minimum of one other individual are joint owners in the enterprise. Among the most important things to be familiar with is that you will be specifically liable for the actions of your partners and employees. Some of the benefits of setting up a partnership include the ability to join resources and knowledge with someone else. For instance, you might know the way to run a trucking company, but your partner might know the way 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 separate legal entity from you as an individual. If for example, the business obtained a loan in order to purchase 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 to be 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 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 one of the most flexible form of business structures available. While limited liability companies do share a couple of the same features, as corporations they stand out. Like a corporation, they offer limited liability protection. On the other hand a limited liability company can include a single owner, in which case they are taxed as though they were a sole proprietorship. You can even have multiple owners for your limited liability company. One of the other benefits is that they are generally much simpler to setup than corporations and have fewer regulatory demands. In a limited liability partnership you are protected 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 managing is very small and has no debt.

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