Wisconsin IRS Form 2290

Among the first choices you must make as a new company is determining what kind of business structure you will file as. Because you will possibly be operating under the same structure for the rest of the life of the business, recognizing which type to file could be a complicated decision. There are a wide range of varied state filings available for businesses nowadays. Make sure that you choose the file the ideal one as it can make a huge difference for the financial future of both you and your business. To make your task less complicated, below you will find out the major benefits of each sort of state business filing.

If you do not assign your business with any other form of structure then it will be considered a sole proprietorship by the state. The main features of sole proprietorships are they are simple 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 is subjected to.

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A partnership is where you and at least one other individual are joint owners in the enterprise. Among the most significant 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 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 number of notable 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 secured a loan in order to invest in a new rig and was unfit to meet the payments, your lender could not pursue you individually for the payment owed. Sub chapter S corporations are a reasonably 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 regular 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 several of the same features, as corporations they are distinct. Like a corporation, they offer limited liability protection. However a limited liability company can contain a single owner, where 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 less complicated to setup than corporations and have fewer regulatory requirements. 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 guidelines 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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