Ohio IRS Form 2290

One of the first decisions you will need to make as a new entrepreneur is figuring out what kind of business structure you will file as. Because you will likely be operating under the same structure for the rest of the journey of the business, knowing which type to file can be a difficult decision. There are a wide range of varied state filings available for businesses these days. See to it that you choose the file the appropriate 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 type of state business filing.

If you do not allocate your business with any other type 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 system 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 a minimum of another individual are joint owners in the business. One of the most essential things to be familiar with is that you will be specifically liable for the actions of your partners and employees. A few of the benefits of creating a partnership include the ability to join resources and knowledge with someone else. For instance, you might know tips on how to run a trucking company, but your partner might know the way to access capital.

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Corporations have a lot of substantial 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 applied for a loan in order to purchase a new rig and was unfit to meet the payments, your lender could not pursue you in person for the payment owed. Sub chapter S corporations are a pretty 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 in the same way as a partnership. This helps to stay clear of 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 several of the same features, as corporations they are distinct. Like a corporation, they offer limited liability protection. Having said that a limited liability company can include a single owner, where case they are taxed as if they were a sole proprietorship. You can even have multiple owners for your limited liability company. Among the other benefits is that they are generally easier to setup than corporations and have fewer regulatory prerequisites. 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 administering is very small and has no debt.

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