What type of legal entity does your business operate under? What special privileges does that grant it?
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What type of legal entity does your business operate under? What special privileges does that grant it?
Answers
Answered by
1
There are several types of business entities, namely:
1) Sole proprietorship
- This is a business owned by an individual and there is no legal distinction between the owner and the business
Special privilege:
i) It is simple to put up and operate.
ii) There is no requirement of state filing to put up the business
2) Partnerships
A partnership is business entity where the owners share liability and profits - may be equally or in terms of ratios.
Special privilege:
i) No state filling is required to start a partnership business entity.
3) S corporations
S corporations are business entities that share their profits and liabilities with shareholders for tax purposes.
Special privilege:
Are independent entities from the legal and tax obligations of their owners.
ii) Distinction between personal asset and business debt.
4) Limited liability companies
Are business entities where business members are legally separate from the business liabilities and debts.
Special privilege:
i) Not required to hold annual meetings or have record of minutes
ii) Is governed by the business operating agreement
iii) This business entity is a separate structure from their owners.
5) C corporations
This is a business entity where the business is taxed separate from its owners.
Special privilege:
i) No limit to the number of shareholders
ii) Separate entity from its owners
iii) Distinction between personal assets and business debts.
Your business can fall under any of this categories.
1) Sole proprietorship
- This is a business owned by an individual and there is no legal distinction between the owner and the business
Special privilege:
i) It is simple to put up and operate.
ii) There is no requirement of state filing to put up the business
2) Partnerships
A partnership is business entity where the owners share liability and profits - may be equally or in terms of ratios.
Special privilege:
i) No state filling is required to start a partnership business entity.
3) S corporations
S corporations are business entities that share their profits and liabilities with shareholders for tax purposes.
Special privilege:
Are independent entities from the legal and tax obligations of their owners.
ii) Distinction between personal asset and business debt.
4) Limited liability companies
Are business entities where business members are legally separate from the business liabilities and debts.
Special privilege:
i) Not required to hold annual meetings or have record of minutes
ii) Is governed by the business operating agreement
iii) This business entity is a separate structure from their owners.
5) C corporations
This is a business entity where the business is taxed separate from its owners.
Special privilege:
i) No limit to the number of shareholders
ii) Separate entity from its owners
iii) Distinction between personal assets and business debts.
Your business can fall under any of this categories.
Answered by
0
Well, the answer might differ depending on who you ask. As for me personally, my company is legally a 'Limited Liability Company' also known as LLC or Ltd. As a Limited Liability company, I have to pay more corporation Tax than others, but in return, I get the added benefit of a safe guard if my company goes bankrupt. As a LLC, every debt or loan I take or any money I owe to creditors, suppliers or bank, is actually owed by my Company, not me personally. If tomorrow I don't have money, the bank or any other party cannot claim money from me directly. They might sell my company assets etc but not from me.
This provides peace of mind, since you never know what can happen in Business
This provides peace of mind, since you never know what can happen in Business
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