What are the differences in Partnership, LLC, S-Corporation? Are you thinking about starting a business? Do you fully understand the differences between a sole proprietorship and a general partnership, or a limited liability company and an S-Corporation? Deciding how to structure your company is an extremely important decision. There are major differences between each type in terms of what papers, if any, need to be filed, as well as how income is taxed, for both the company and the employee. Another important difference between is the amount and type of liability each individual within the company will hold.
Differences in Partnership, LLC, S-Corporation
Some partnerships do not require much, or anything, to be filed when the partnership is created. Others, however, require that the partnership register with the state. Furthermore, those partnerships may also be required to provide the name of the partnership and proof of insurance coverage. Corporations and limited liability companies also have their own formalities that must be followed. Some have articles of incorporation, while others have articles of organization. One may require the bylaws to be filed, while another may not even require an operating agreement to be filed.
In addition to the documents that must be filed and the amount of liability that goes along with each type of partnership or corporation, each also has its own tax structure. Some receive a double tax, where the income for the company is taxed and the dividends paid out are also taxed. Others receive a pass-through tax, which means that the tax is only applied to the income paid to the individual employee.
It is important to have an Florida attorney help with the creation of your company because an attorney can help guide you through the process, so that you better understand what the company is legally obligated to do after its creation. Another reason to have an attorney help is if any legal trouble arises in connection to the company, there is an attorney that is already familiar with your company’s structure.
If you are looking to Incorporate your business, the attorneys at Boyer Law Firm have the experience necessary to help you get off on the right foot.