Business

Definition
A commercial activity engaged in as a means of livelihood or profit, or an entity which engages in such activities.

1.LLC and LLP

Limited Liability Companies (LLC) and limited partnerships (LLP) are two new business units CR A! " some of the characteristics of corporations, partnerships mi#, and individual companies R". !hey have some uni$ue advantages for growing businesses.

Advantages of LLC
An LLC is a hybrid organi%ation, the characteristics of both a corporation and a partnership. &ts members ' similar to corporate shareholders ' receive interests in the LLC in e#change for goods, money or services. As a business an LLC is a separate legal entity that limits the liability of the members. (owever, it has the ta# advantages of a partnership. Limited liability companies are also free of many rules of the legal re$uirements that companies that contains these annual reports, director meetings, shareholder re$uirements and so on. )or a time, re$uires almost every state and LLC, two or more members, but that is no longer the case. !his important change was in response to changing regulations, the &R* clearly allow single'member LLC. As a result, in most states, if you plan the sole owner of a company and you want to limit your personal liability, you can choose between a business and forming an LLC.

Advantages of the LLP

A Limited Liability Partnership (LLP) is simply a partnership whose partners en+oy some protection from personal liability. &t is not a separate entity for income ta# ' Profits and losses are passed on to partners. !ypically, however, are a partner in an LLP is personally liable only for its own negligence or that a wor,er under the direct supervision of the partner. !he partner is not personally liable for the negligence of others in the company. !hat helps, but as partners in an LLP, you are still personally responsible for a variety of partnership debt is not a $uestion of your own carelessness ' such as obligations to commercial creditors, lenders and tenants ' no matter which partner incurred liability for the partnership.

2.Corporation.
A company will be established as a legal entity or structure under the authority of

the laws of any state, consisting of a defined earth person or group of persons who are shareholders. !he company is recogni%ed as the e#istence and separate from that of its members. -ust li,e a real person, a company can enter into contracts, sue and be sued, pay ta#es separately from its owners and necessary to the other things, to do business. &ntegration can be a complicated process. .ou can choose a lawyer to guide you through the process (i.e. "o & need an attorney to a corporation/ )or further information form). &ndependently ta,e away from the bow, the pros and cons for before you go listed on the integration of the business. And if you0re willing to ta,e, ma,e sure you read when you decided.

Advantages:
Limited liability. 1ne of the main reasons for establishing a limited liability
company is the protection provided for the owners. *ince a company is considered a separate legal entity, the shareholders have limited liability for the debts of the company. !he personal belongings of the shareholders are not threatened to satisfy corporate debts or liabilities. Corporation tax treatment. *ince a company is a separate legal entity, it pays ta#es separate from its owners (at least in the traditional C Corporation). 1wner of a company only pays ta#es on corporate profits paid to them in the form of salaries, bonuses and dividends. !he company pays ta# at the corporate level on any profits. Attra tive investment. !he built'bearing structure of a company ma,es it attractive for investors. Capital attraction. !he stoc, structure also allows leading companies and talented people by giving them to gain a property interest in the form of stoc, options or shares. !"ners # employees. A contractor who wor,s in his own business can an employee and therefore eligible or deduction of many types of e#penditure, including health and life insurance. !perating stru ture. !he companies have a number of management structures. !he owner of a company0s shareholders, a board of directors, which then chooses to select the officers. 2nli,e the election of directors, shareholders do not participate in the activities of the society. !he 3oard is responsible for the administration and the e#ercise of the rights and obligations of the Company. !he 3oard sets corporate policy and strategy for the company and elects officers ' usually a C 1, vice president, treasurer and secretary ' to monitor the policy by the 3oard and to manage the company on a day to day basis. &n a small company that tends lines between shareholders, board of directors and officers to blur because the same people can be employed in all capacities. Perpetual existen e. A company will continue to solve the shareholders or to rule another company together. $hares are freely transferable. *hares of companies are free, transferable because as a separate entity, is not the e#istence of a company depend on who

the owner or investors at a given time. A company continue to e#ist as a separate entity and not terminated or dissolved, even if shareholders sell their shares or to die. *hares of companies are freely transferable unless shareholders have limited 4buy'sell4 agreement when and to whom shares may be sold or transferred. Also, securities laws limit the transferability of the shares.

Disadvantages
)ees. &t costs money to ta,e over. !here are four types of fees5 fees for the articles with the *ecretary of *tate, in the first year franchise ta# fees for various state filings and legal fees file. 3ut each year decide to process tens of thousands of businesses without a lawyer online. )or e#ample, a basic instrument for the recording costs and management fees on a site li,e Legal6oom.com only 7 88. %ormalities. !he proper corporate formalities of organi%ing and running a business must follow to obtain the benefits of a company. Paper"or&. Paperwor, is a huge part of the corporate formalities that must be respected. Reports and statements prepared and submitted in time to obtain boo,s and records and the information should be separated from corporate actions will be held, should be retained, including the shareholders and 3oard of "irectors and licensing of personal accounts and assets. 'he dis losure of the names of the offi ers and dire tors. 9ost states re$uire that names of shareholders do not re$uire a matter of public interest, but many countries re$uire that the names and addresses of its officers and directors of one or more documents to be submitted to the *ecretary of *tate listed. (esolution. *ince the companies have an eternal e#istence, provides a mechanism for the resolution of a corporation and li$uidating its assets. Resolution is not automatic. A corporation may be dissolved voluntarily or involuntarily. A company managers and directors with responsibility for the solution of the company, including gathering corporate assets, the creditors and debts, and distributing the remaining assets to the shareholders. 'ax onse)uen es. Companies have potential double ta# conse$uences ' a time when the profits of the company, and half again as dividends to shareholders. Company to issue the impact of this ta#.

*.$ole proprietorship
!he most common and simplest form of business is a sole proprietorship. 9any small businesses in the 2nited *tates are sole proprietorships. A single company owns and manages the company and is responsible for all transactions. !he owner personally liable for all debts incurred and liabilities of the company. A sole

proprietor can not sell ownership of the company for a period of time and if they see fit. As the owner of a sole proprietorship, a company also has his or her heirs. &n these cases, no specific business ta# paid by the company. !he owner pays ta#es on income from the investment as part of his personal income ta# payments. *ole proprietors must meet the admission re$uirements in states where they operate, as well as local ordinances and %oning regulations. !he paperwor, and formalities are significantly lower than those of competitors, so that individual merchants to open a business $uic,ly and with relative ease ' from a bureaucratic point of view. &t can also cost less money to a business as a sole trader, which is attractive for many new entrepreneurs find it often difficult to attract investors to start.

Advantages of a sole proprietorship

'A sole proprietor has complete control and decision ma,ing about the company. '*ale or transfer can be at the discretion of the individual company. ':o ta# payments. 'legal minimum on the formation of a single company. 'few formal business re$uirements. ;

Disadvantages of a sole proprietorship

'!he sole owner of the company can be held personally liable for the debts and liabilities of the company. 9oreover, this ris, e#tends to all liabilities arising committed as a result of the actions of company employees. ' All responsibilities and business decisions fall on the shoulders of the individual company. ' &nvestors will not invest in the rule in individual companies. :ote5 &f the company is carried out under fictitious names, is the sole owner of all applicable forms under the fictitious name file or doing business as ("3A). !his does not mean that the company is a separate entity from a legal point of view. *ole proprietors are not liable, even if he or she does business under a fictitious name. 9ost sole proprietors rely on loans and personal financial assets of their business first. *ome choose to ta,e after it has started to grow, while other companies maintain their sole proprietorship for many years.

4.Partnerships. <eneral partnerships consist of two or more partners for both companies. !hey share assets, profits, liabilities and responsibilities of management for the operation of the company. <eneral partnerships are formed by people. !hey are the same as for a sole proprietorship, business income that each partner0s personal income ta# return includes means ta#ed. ach partner can bring losses to the company relative to

its own ta# return deductions. <eneral partnerships offer a means to raise capital $uic,ly, and can also allow several people to combine resources and ,now'how. 3ut several problems. "isadvantages of a <eneral Partnership5 Partners may have different visions and goals for the company. &t may be in the form of time and financial commitment is une$ual. &t cans also personal disputes. Partners are personally liable for business debts and obligations. ach partner may also be held liable for the debts incurred, decisions and actions by the other partner or partners. ventually, it will almost certainly be differences in management, operational procedures and the future vision for the company. .ou may encounter difficulties in attracting investors. )or these and other reasons, the general partnership agreements are carefully drawn with legal assistance, and signed by all partners. &n addition, means more than the dissolution of the partnership in the event of death, disability, or if one partner wants the company for any other reason, personal or professional choose. <eneral partnerships can be less e#pensive and re$uire less paperwor, and formalities than a corporation, but the partnership agreement is an important element and should be made by all parties with due diligence.

Advantages of a +eneral Partnership:

!hey have a common financial commitment. !hey can pool their resources, s,ills and strengths. Limited start'up costs. !here are few formalities (mostly e#isting licenses). <eneral partnerships can thrive when each partner brings specific strengths of the economy. &f each partner ta,es a special role and it indicates general agreement on the business plan, goals and visions from the start can be a beneficial partnership. !he wor, can be done faster, and with different partners, the potential of attracting funding and moves to increase donor. &n the end, the success of such efforts largely on the personalities of those involved.