What is the difference between?

Question

sole proprietary, LLC, Inc., and the other labels that you can decide on when starting a new business. I want to be the only person selling my products, but I was told that sole proprietary might not be the only way to go. Please help. I'm so confused.

Answer 1

In most of the others, you have to have partners. Going solo is the way to go. I am in a partnership. Luckily we agree and most things and do not take advantage of each other. You have to truely trust another person to include them. Taxes are easier on the sole proprietary. Corporation is best for not being sued individually. The taxes are hard to do in this situation. Very confusing subject, but you can change later after going solo and learning more about each. Good luck.

SOLE PROPRIETARY
A business structure in which an individual and his/her company are considered a single entity for tax and liability purposes. A sole proprietorship is a company which is not registered with the state as a limited liability company or corporation. The owner does not pay income tax separately for the company, but he/she reports business income or losses on his/her individual income tax return. The owner is inseparable from the sole proprietorship, so he/she is liable for any business debts. also called proprietorship.

PARTNERSHIP
A type of unincorporated business organization in which multiple individuals, called general partners, manage the business and are equally liable for its debts; other individuals called limited partners may invest but not be directly involved in management and are liable only to the extent of their investments. Unlike a limited liability company or a corporation, in a partnership the partners share equal responsibility for the company's profits and losses, and its debts and liabilities. The partnership itself does not pay income taxes, but each partner has to report their share of business profits or losses on their individual tax return. Estimated tax payments are also necessary for each of the partners for the year in progress. Partnerships must file a return on Form 1065 showing income and deductions. Estimated tax payments are also required if they expect their income to be greater than $1,000.

LLC
Limited Liability Company. A type of company, authorized only in certain states, whose owners and managers receive the limited liability and (usually) tax benefits of an S Corporation without having to conform to the S corporation restrictions.

CORPORATION
The most common form of business organization, and one which is chartered by a state and given many legal rights as an entity separate from its owners. This form of business is characterized by the limited liability of its owners, the issuance of shares of easily transferable stock, and existence as a going concern. The process of becoming a corporation, call incorporation, gives the company separate legal standing from its owners and protects those owners from being personally liable in the event that the company is sued (a condition known as limited liability). Incorporation also provides companies with a more flexible way to manage their ownership structure. In addition, there are different tax implications for corporations, although these can be both advantageous and disadvantageous. In these respects, corporations differ from sole proprietorships and limited partnerships.

Answer 2

When you start a business, if something should go wrong, you don't want your creditors to be able to take your personal belongings and accounts such as your home.

You prevent that from happening by making your business a separate entity from yourself.

For more detailed information, contact the Small Business Administration.

Answer 3

I have no idea