VARIOUS FORMS OF CORPORATIONS
There exist various forms in which one can conduct his or her business. In order to determine which form of business organization to use one must consider the extent of personal liability that one has from the business and how the business will be taxed.
The most common forms of business organizations include:
(2) Subchapter S corporation
(3) Subchapter C corporation
(4) Limited liability company
(5) Sole proprietorship
(7) General partnership
(8) Limited partnership
(9) Limited liability partnership
(10) Non-profit Organization
For liability purposes, the law treats an LLC or a corporation as separate from the owners. How do you choose between them? In most cases, the LLC has a slight edge. It usually involves less paperwork than a corporation to set up and maintain. In addition, the set-up and maintenance costs are usually a bit less. On the tax side, by forming either an LLC or a corporation, you gain tax flexibility.
Sole Proprietorship and Partnerships
As a sole proprietor, you bear the full legal liability for business debts and for any legal judgments against your business. Similarly, in a general partnership, each partner is personally liable for all monetary obligations.
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