There are three kinds of partnerships: General Partnership: A partnership ceases to exist when certain criteria are met, such as the death or bankruptcy of a partner or if the partners decide to end the partnership. Partnership can be as simple or complex in structure and administration as the partners want it to be. Taxation is a bit complex, but the partnership itself pays no taxes Each partner has joint and several liability to the partnership Since the liability of partners is joint and several, any particular partner can be made to pay the entire debts of the partnership, regardless of the allocation of profits and losses, or capital contributions made into the partnership. The partnership is required to file an informational return to the government to report what the profits and losses of the partnership were and how these were allocated to the partners. The persons intending to enter into a partnership make an agreement to share profits and losses. These individuals are responsible for the business, including all liability and any profit or loss. It is an association of two or more persons (persons being people, corporations, other partnerships, LLC's, trusts or others) to carry on, as co-owners, a business for profit. However, since legally the firm is nothing more than an individual using a trade name, there is no limit to the owner's liability for the firm's obligations. Profits and losses of the business are of the owner's personal income and the proprietorship firm is disregarded for tax purposes. On death of the owner sole proprietorship immediately ceases to exist Firm's liabilities are treated as personal liabilities of the owner Virtually no formalities to be observed except basic bookkeeping This person is responsible for the business, including all liability and any profit or loss. It is a business owned and controlled exclusively by one person. Sole proprietorship is the simplest form of business type. While there are many different forms of business entities, there are four main types in the United States:Ĥ.Business Corporation 1. Now about options for business structuring under law. In addition, be sure to consult a lawyer to assist you and to answer any questions that you may have. Try to learn as much as you can before making a decision. It is here that the present article would come handy as far as basic information about available forms of business organizations are concerned. Taking this decision is necessary for tax purposes and also helps an entrepreneur to plan for the future business expansion. That is to say what business identity one wants to adopt for one's business out of the various options available under law. When a person plans to set up a business, one of the first questions that crosses one's mind is to determine what business structure is suitable for the intended business.
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Types of Business Entities & Corporation in the USA How to Decide What Type of Business Entity is good for you before you form or incorporate a Company in USA
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