West Virginia IRS 2290

Among the first decisions you have to make as a new company is figuring out what type of business structure you will file as. Because you will likely be operating under the same structure for the rest of the existence of the business, knowing which type to file might be a tough decision. There are a wide range of various 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 simpler, below you will learn the major benefits of each type of state business filing.

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

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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 vital 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 starting a partnership include the ability to join resources and knowledge with another person. For example, you might know how 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. 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 applied for a loan in order to invest in a new rig and was unable 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 stay clear of 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 number of the same features, as corporations they stand out. Like a corporation, they offer limited liability protection. Nonetheless a limited liability company can include a single owner, where case they are taxed as if they were a sole proprietorship. You can additionally have multiple owners for your limited liability company. Just one of 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 safeguarded from the actions of these other parties. Simultaneously 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 operating is very small and has no debt.

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