Tennessee Fuel Tax Report

One of the first arrangements you must make as a new entrepreneur is deciding what sort of business framework you will file as. Because you will most likely be operating under the same structure for the rest of the existence of the business, knowing which type to file could be a tough decision. There are a wide range of assorted state filings available for businesses these days. Make sure 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 simpler, below you will learn the major benefits of each form of state business filing.

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

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A partnership is where you and at least one other individual are joint owners in the business. One of the most essential things to be familiar with is that you will be individually liable for the actions of your partners and employees. Some of the benefits of creating a partnership include the ability to enlist resources and knowledge with another person. For example, you might know the best ways 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 significant benefits over partnerships. The most important of these is limited liability. What limited liability means is that the corporation is a completely distinct legal entity from you as an individual. If for example, the business obtained a loan in order to buy a new rig and was not capable to meet the payments, your lender could not pursue you in person 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 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 some of the same features, as corporations they are distinct. Like a corporation, they offer limited liability protection. Nonetheless a limited liability company can contain 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 conditions. In a limited liability partnership you are safeguarded from the actions of these other parties. Additionally 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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