If you need to choose a business entity, Clifford, Ross, Raudenbush & Cooper, LLC can help. Since there are a few main business entities, it’s necessary to understand what differentiates them from one another. This way, you’ll be able to make the right choice. The main business entity choices are as follows: sole proprietorship, partnership, and limited liability company. We’ve outlined what differentiates each choice so you can make the right decision when the time comes. If you’re in the El Paso area, choose Clifford, Ross, Raudenbush & Cooper, LLC as your CPA agency!
Often seen as the “default” form, sole proprietorship translates to one owner. Sole proprietorship is completely identified with you, the business owner. This means that if your business makes a profit, it will translate to income for yourself. Although this is a very positive attribute of this business entity choice, it still has some negative details of which you should be aware. Since it is intertwined with you, if your business loses money or gets sued, then you will lose money on a personal level. On the positive side, sole proprietorship provides you with complete flexibility. This means you can change policies, direction, or your company’s overall focus whenever you so choose. This can have detrimental outcomes, however, since there is a potential for issues and damage to permeate throughout personal life.
Partnerships are, by their very essence, finicky. Since they require two or more people to become a reality, it’s necessary to keep in mind what might happen if one partner decides to quit or disappears. If this occurs, you will be held responsible for paying any debt. This isn’t to say that successful partnerships aren’t possible. They just deserve special attention. Each partner should have the right skills and abilities to complement each other. This way, the business will thrive.
This business entity combines the liability protection of a corporation with the option of being taxed as a partnership or corporation. For this reason, the Limited Liability Company (LLC) is one of the most popular choice of business entities today. Since LLCs are made up of members, they are protected from liability. Unlike sole proprietorship or partnerships, limited liability companies place a buffer zone between the members and the company. When you form an LLC, your business will become it’s very own legal entity. This mean it will have separate debts, legal matters, and more.
Make sure your next business venture starts off on the right foot. Clifford, Ross, Raudenbush & Cooper, LLC is ready to help. We have been providing accounting services to businesses and individuals in the Sun City for many years. We will gladly provide the right advice and assistance in order for your business to thrive in the competitive world of small business. Contact Clifford, Ross, Raudenbush & Cooper, LLC today to learn more about how we can help your business thrive!
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