Talking About Business: A way of success

I have made a few assumptions

• First, I assume you want to turn a hobby into a business
• Or maybe you want to learn about operating a business
• Better still you want to expand on the current business you are operating

Four most common business structures are

• The sole proprietorship: 
  • easy to form and gives you complete control of your business.
  • You’re automatically considered to be a sole proprietorship if you do business activities but don’t register as any other kind of business.
  • do not produce a separate business entity.
    • This means your business assets and liabilities are not separate from your personal assets and liabilities.
    • You can be held personally liable for the debts and obligations of the business.
• Partnership:
  • the simplest structure for two or more people to own a business together.
  • There are two common kinds of partnerships:
    • limited partnerships (LP) and
    • limited liability partnerships (LLP).
• Corporation 
  • C corp
    • A corporation, sometimes called a C corp, is a legal entity that’s separate from its owners.
    • Corporations can make a profit, be taxed, and can be held legally liable.
    • Corporations offer the strongest protection to their owners from personal liability,
    • but the cost to form a corporation is higher than other structures.
    • Corporations also require more extensive record-keeping, operational processes, and reporting.
  • S corp
    • An S corporation, sometimes called an S corp, is a special type of corporation that’s designed to avoid
    • the double taxation drawback of regular C corps.
    • S corps allow profits, and some losses, to be passed through directly to owners’ personal income without ever being subject to corporate tax rates.
• Limited liability company:
  • An LLC lets you take advantage of the benefits of both the corporation and partnership business structures.
  • LLCs protect you from personal liability in most instances, your personal assets — like your vehicle, house, and savings accounts — won’t be at risk in case your LLC faces bankruptcy or lawsuits.
    • However, beware of PIERCING THE CORPORATE VEIL
  • On rare occasions, a court will pierce the corporate veil to impose liability for an LLC’s debt and obligations on its members.
  • Example: When company finances are not kept separate from those of members.

All in the BIG DREAM to make PROFIT

Let’s make it a discussion and we will try to address all questions