Operating a business can be a daunting task. There are many factors to consider, and the decision you make about how your company is structured could have a significant impact on your legal obligations, who manages the company, how much you pay in taxes, and who takes care of the responsibility for all debts incurred by the company. Here are the different types of business structures and what they mean to you as a business owner.
A sole proprietorship is a form of business structure that is owned entirely by one individual. All of the shubhodeep prasanta das business functions are controlled by the owner and no other person or entity participates in the operations of the business. The owner of such a business does not pay any taxes on personal income, although there is usually an obligation to deduct expenses for the use of the business property and services from gross income.
A general partnership is a business structure in which two or more people share equal management responsibilities, decision-making powers and profits. All of the partners are jointly responsible for the business debts and liabilities. With a general partnership, there is no separation between the business and the owners’ personal property, so both can be held liable if one partner commits a tort. The partnership agreement will specify who gets what percentage of profits and even how decisions are to be made.
A limited partnership is a business structure in which two or more people share equal management responsibilities and decision-making powers, but the partners own 100% of the business. Such an arrangement is most common with closely-held corporations or entities that are owned by their principals. In a limited partnership, partners agree to provide management, service and financial direction for their business.
A series LLC structure is a hybrid of the multiple-member LLC and the limited partnership structure. In a series LLC, one or more series of a single member are formed. Each series operates independently from the others, but there is liability protection provided against claims made against one series by another series or by the single member that owns all of the series together.