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2. A partnership can be a group of Architects or doctors that share the same working place and contributes to the business the same share as well as sharing the gain and loss os the operation.
Advantages: Easy to constitute, not too expansive, better credits than the one person ownership business.
Disadvantages: The same as with the sole proprietor partners share liability if it fails to pay the business obligations. A different variant is Limited Liability Partnership witch protect the partners from sharing liability. When it is an LLP, there should be a very clear agreement about how the share the obligations and gaining of the partnership.
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Taxation is managed more complicated. There are some ways to save tax paying by filing your income and the income you get for the company operation. Find IRS tax forms here.
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3. Limited liability company (LLC) this is the structure of most shareholder companies that can be any professional service with office managed by owners and employees together.
LLC is more complex than sole proprietorship and partnerships. LLC can have only one owner or have partners that are other LLC. Another description is Pass-Through Entities
Tax Reform affect on Pass-Through Entities Part 1 of 2
Tax reform affect on Pass-Through Entities Part 2 of 2
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Advantages are Limited Liability of the owners towards any financial faults of the LLC company. Partners are liable only for their part in the shares. This is only for the commercial activities faults, the responsibility for financial crimes made by using the company has no limits. LLC is the very popular structure for making business because of the limited responsibility in the case of going on chapter 11.
Disadvantages are the complexity to manage to compare to sole proprietorship or partnerships if the business is not having a high volume of business. Being less formal than a corporation makes the LLC a better choice than a corporation. ”
Taxation Has the benefit of using “Flow-Through” treatment that means that the owner file is own taxes adding the LLC benefits to his filing. Find IRS tax forms here.
4. Corporations are the bigger business in the market, like Coca-Cola or Toyota and other world-known businesses. A corporation is a legal entity different from its owners, It has the right and responsibilities as an individual, it may contract and take loans sue and be sued and own assets and pay tax like a real person.
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The corporation advantages are the protraction of the owner’s assets in case of failure. Shareholders are not responsible for faulting in paying debts more than the money they invested
Disadvantages are the complexity of managing this kind of business. A corporation is made for big business, though they all started small some as sole property ownership then grew into LLC and finally became a large corporation.
Taxation and corporation are more complex than the above mention structures for making business; taxes are paid to the federal, state and some local municipality. There are two type of corporations a C corporation and an S corporation. C corporation is taxed on earnings first, and its shareholder is taxed on their part of the dividends when they file for taxes. The C corporation distributes the dividends after paying taxes from the corporation’s profits. The shareholder does not deduct losses of the corporation from and pays tax only on the dividends.
The S corporation pays only one level of taxation. Read more about S and C corporation. Here, and find IRS tax forms here.
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How to get a name and register it
Choose a few optional names for your business; you may find some name was taken before. Make sure that you got one name that is free for trademark research.
Corporations and LLC get their names registered automatically when they create and register their business.
A Doing Business As DBA registration is used when an existing corporation, LLC or sole proprietorship, partnership start a business.
It is essential to look for a good and original name before registering it with the authorities. If you do not use your name, you need to have registered your commercial name with the state government. Be sure that the name you have selected is available in the state that you are going to register it. States register a business name so it can be that in other states businesses are bearing the same name. Check the trademark to avoid an undesired and expensive problem in the future. Do a Trademark search
When you are going to make a new corporation and LLC, your business name is registered at the same process that takes place for the registration of the entities. You should follow the rules for naming corporations, and LLCs take your time to learn this rules here.
Day after day and stage by stage your business will grow
Existing corporations and LLCs that want to have a different commercial name and new sole proprietorship, partnerships will register a Doing Business As (DBA) name.
The county clerk office or with your state government is where you need to go for registering this names. Read how to do it here. If you want to have your business name as your trademark you can read here how to do it Filing for a trademark will cost you about $300. A trademark will protect your chosen words or names, symbols, and logos that distinguish goods and services. This is one important step towards creating a brand name for your business.
A seller’s permit, what is it and how to deal with it?
In the case that your business is selling products that can be defined as tangible property, no matter if it is retailing or wholesaling, you need to have a seller permit, “Tangible property” means physical objects like cars or toys.
Some states will require a seller’s permit for a service-oriented business like lawyer or accountants. Help yourself by reading this IRS website.