Types Of Business Entity Formation In Us

By Author: Alice Coope
Total Articles: 213
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Most business owners today have got involved in the process of setting up a proper legal entity for their business. This is understandable considering the probable difficulties of business entity formation, business law and the perceived high expenses that are involved in these processes. Business refers to the continuity and there is an initiating point for an incessant procedure. This point gets initiated with incorporation. However, if you are an American citizen or a US resident, looking for business entity formation, then you can get the same incorporated under the following kinds:-

* Sole Proprietorships

* Partnership

* Limited Liability Company

* Corporation

If you are wondering how to go about it, then you can get in touch with eminent tax planning service providers in US. They would offer all the necessary guidelines regarding business entity formation. The above mentioned four kinds are discussed ...
... below:-

Sole Proprietorship

This type of entity formation is also termed as a sole trader or proprietorship. It is owned and operated by an individual and there’s no legal difference between the business and owner. It can be set up at a reasonable cost, is simple to dissolve and usually have no tax planning. This is because the profits and losses are a part of the individual owner’s income.

Partnerships

This type of business entity too can be formed at a reasonable price. Partnership business involves two or more people or any business entity sharing the profits and loss incurred equally. Every partner involved in the business has joint responsibilities to the partnerships. Furthermore, any partner might be held responsible to pay off the total debts of partnership regardless of his participation in capital contribution, profit or losses.

Limited Liability Companies (LLCs)

This is a highly flexible kind and can be used for multiple business types. The members involve can but does not need to have limited liability. They can choose to be taxed either as partners or corporations or can also be disregarded for tax aspects like that of a sole proprietorship.

Corporations

Corporations are slightly complex in comparison to the other business entity types. A new legal entity is set up by forming a corporation which is distinct from its owners. Hence, it depends on its shareholders. Depending on the state law, a corporate can be owned by a single person or can have one officer or director.

Apart from guidance on business entity formation, tax planning companies in US also offers services such as:-

* Registered Agency Service

* Application of EIN

* Maintenance of minute books and drafting of resolutions

* Business Licenses & permits

* Bylaws and Operating Agreements

* Certificates of Good standing

* Corporate & Compliance kits

* Registering a Business name

* Foreign Corporations for operations in multiple states

* Filing of Annual/Franchise tax

* Testimonials

A market review would show that majority of business operate as partnerships or sole proprietorship and does not leverage other benefits that are available, in case they modified the legal format of their business. These benefits might involve essential elements such as limiting personal liability; improve tax treatment or adding a professional touch to your business name by incorporating LLC or INC in the end.

Read Also On: FBAR,US India Tax