Rhode Island IRS Form 2290

Among the first choices you should make as a new company is deciding what type of business system you will file as. Because you will probably be operating under the same structure for the rest of the existence of the business, determining which type to file could be a challenging decision. There are a wide range of different state filings available for businesses nowadays. Make 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 uncover the major benefits of each variety 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 benefits of sole proprietorships are they are straightforward to setup, have few filing requirements, and your business income is taxed together with your personal income. However, this framework is not a separate legal entity from you as an individual, therefore 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. One of the most essential things to be aware of is that you will be directly 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 someone else. 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 lot of important 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 buy 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 as being 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 in the same way 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 the most flexible form of business structures available. While limited liability companies do share a couple of the same features, as corporations they are distinct. Like a corporation, they offer limited liability protection. That being said a limited liability company can include a single owner, where case they are taxed as if they were a sole proprietorship. You can also have multiple owners for your limited liability company. Just one of the other benefits is that they are generally less complicated to setup than corporations and have fewer regulatory prerequisites. In a limited liability partnership you are shielded 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 managing is very small and has no debt.

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