When it comes to business solutions in America, the solution is as wide as a life span. Workers that appear to be for you are just out for themselves or maybe they are more educated than you in their own mind. We as a people must survive, so we must know and grow with business. We start with entities, which the government gives power, to help us in the long run. All that US capitalism is built on is enshrined here in small form for the young and wise.
Sole Proprietorships – A business formed by a single person. Liability is all on the individual;. you are responsible for acting.
To apply: Need an ss4 – federal employment index number, same as a tax id number Then go to city or town clerk and get business certificate. Ex (Jon G DBA as A+ pizza) Sole Proprietor ships are easy to start: need to have an owner’s equity statement, balance sheet and a profit and loss sheet. You fill out a Schedule C -1040 Tax Form. (One form) 15.3 % is the sole proprietor tax from government.
Partnerships and Joint Ventures – is the meeting of two to make money. Everybody is responsible for everyone acting in the business.
To apply: Get partnership certification from county clerk, fill out and get business certificate, apply for ss4- tax number then take both to bank, bank cashes checks legitimately, then run business Partnership does not pay tax; it is split halfway between the partners. Get K1 form: Partner’s Share of Income, Credits, and Deductions. Then send to accountant 1040 form. There is a problem with partnerships: you are always liable for everyone… even if you are going in to the partnership. Check out individual person at county clerks office (LLC protects you from other person) (a pc- professional corp. changes liability for professionals)
A Limited Partnership is a quasi corporation; (quasi- somewhat created and accepted) it is like an investment device. A Limited Partner puts in 25k and he can’t be in control of anything and also can’t be sued. No liability for him.
To apply: go to county clerk and ask where you send the Limited Partnership Agreement . What is on the agreement is as follows :
1) Name of LLP. 2) Statement that explains business. 3) Total number of partners in partnership. 4) Statement which expresses intent to register as a LLP. 5) The address of business, for service of process.6) Has to be filed by all partners with a majority of interest in the business. A partnership at will – can dissolve at anytime.
Corporation – A legal entity authorizing operations to operate as an enterprise. You have very limited responsibility acting in business. To apply: Start with articles of incorporation. Requirements to be Incorporated is as follows :
1) Your company name INC. (there will be a name search so choose wisely.)- 2) The number of shares for you company would be 200 NPV (no par value.)- 3) Have to have a legal street address –so if you get sued sheriff can serve you.- 4) Your county of business 5) Your Business Clause – what is your trade? What do you do? Precisely and descriptive.
Get a lawyer to review and sign and send it away to state. Call to find out where to send. Pay a fee to state usually $150-$250 to get incorporated. You will want to get a corporate seal so you can get a business account with the bank. You will receive that with your welcome packet from the state along with a (SS4) form which is your incorporation number.
Take these to bank get Corporate Resolution- means that you did this and that and now you can accept funds from in the bank. This is what the state wants you to get. You are now a Corporation.
LLC – Limited Liability Company – Protects partner from partner, avoids double taxation in corporation. Have to follow a strict way of business to make it work. The articles of organization are permission to form a LLC and what is required on the agrrement is as follows:
1) Name of LLC, must include LLC in full words after company name, followed by a LTD or liimited. 2) The duration of a LLC. 3) Address of the operating agreement and where the bylaws are kept. 4) The operating agreement – To establish bylaws of an LLC. Include formation provisions, operating provisions, the nature of business, Distribution of profits and losses, power of the managers- what they can do, Voting rights of the members, admission and withdrawal from the LLC requirements.
Taxation for the LLC – LLC’s majority decides whether it should be taxed as an association (corporation) or as a partnership. For a single individual, they may elect to being taxed as an association (corporation) or hold the owner and entity identical.
Management of an LLC – If the LLC is managed as an internal company, then it is run as a partnership. If the LLC hires outside managers, then the LLC is run like a corporation. They are held to a minimal degree of responsibility. Many other laws occur.
In the end ladies and gentleman if we follow what the government lays out for us, we have more of a chance than not. That is strictly interpreted.