When you first got involved with your business, was there
anything that looked like the right or wrong entity? Personally, I don't mind
if you make a point to include it.
Many entrepreneurs will generally choose to be their sole
entity as a sole proprietorship or a limited liability company (LLC). If you
don't know the difference between the two, or need some help deciding which
legal framework is best suited for your type of business, read on.
Sole Proprietorship
What do I need to
know about this entity? This may be one of the simplest legal frameworks
and one of the most popular, including as the sole proprietor of the% 1%
business in the United States. It has a minimal amount of paperwork involved and
is fairly affordable. Entrepreneurs have become the sole proprietorship who can
exercise full control of their business, become owners.
What types of
businesses benefit especially? Ownership is usually best suited for a
business where there is no risk of personal liability. E-commerce businesses or
companies that can run from home without a physical store such as consulting
have the most success under this factor.
What else do I need
to know when integrating it as exclusive ownership? Remember when I
mentioned this entity is best for businesses with little or no liability risk?
This is because integration as an exclusive owner does not separate the
business from your personal assets. Entrepreneurs who are sole proprietors are
entirely responsible for everything that happens to the business because the
entity does not provide tax or assistance. In some areas, they may be liable to
include corporate debts, employee accidents or injuries, defective products,
important information loss, and lawsuits.
Additionally, single owners face more financing challenges
than most entities. Again, this is because there is no separation between
professional and personal assets. If an entrepreneur wants to expand their
business, reach a credit line or potential investors, they will be asked to
view their personal credit history instead of the business history, as it does
not have one of its own.
Limited Liability Company (LLC)
What should I know about this entity? Affiliates such as LLC
provide liability protection to separate small business professionals and
personal assets. Business is becoming its own entity. This means that in
unexpected circumstances, which may include business or litigation, you will
not be personally liable.
What types of businesses benefit especially? The flexibility
of an LLC gives you the ability to take your business in different directions.
You can open your own facade, expand a chain or include it as a freelancer.
What else do I need to know when I become an LLC? Did you
know that as an LLC you can choose your own tax entity? The LLC structure
allows you to select an S or C corporation for tax purposes. If you qualify as
an S corporation, you can honestly avoid paying strategic employment rates
through programs. LLCs are also not a public building. In case your business is
closed and you want to take the company to the public, you should move to a
formal legal framework like C Corporation. For more information LLC Registration
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