If you are working on your plan for starting a company, it is of vital importance that you have a crystal clear knowledge of the types of companies you can form and what the legal procedures are to avoid encountering any surprises.
Limited Partnership
It is made up of two or more partners and its main characteristics are as follows;
Advantages
The liability of members is limited and they are not liable for the debts of the company with their own assets.The exception to that rule is for those partners who intervene in the management of the business.
Disadvantage
The creation process of limited partnership is more expensive than creating a General Partnership.
This types of company is very much used by companies engaged in the construction works.
C Corporation
This form of business is more complicated and expensive to create in any of its versions or a sole proprietorship business.
Advantages
The partners are not liable for the debts of the business.
Disadvantage
C Corporation is a completely separate entity from the partners and, as a result of them, there is double taxation. On the one hand, C Corporation pays taxes and, secondly, the benefits are distributed among the members as dividends and must be declared by each partner to fill the forms of taxes, and where appropriate, pay a percentage of those earnings.
S Corporation)
In S Corporation, the partners have limited liability as those of C Corporation, but at the time of paying taxes, they do so as sole proprietors or associates the company.
Sometimes partners are unclear about whether to have S Corporation or C Corporation, and sometimes it can also be more convenient to create an LLC. So in the light of available options, it is wise to consult with a prosecutor.
Advantages
At a federal level, there is no double taxation. This is also true at the state level in most states, although there are exceptions and some impose rates similar to that of C Corporation.
This should also be taken into account by corporations doing business in more than one state, as some may have these taxes and others may not.
Also, in the case of members who work for the corporation as self-employed, taxes that IRS collects in respect of Medicare may be more beneficial if they work on the same concept but has the structure of an LLC.
Disadvantages
It is more complex and expensive to create.
I hope it is a helpful article to consider the type for staring a company of solely your own or in partnership.
The million dollar question is, ‘Is it possible to create a profitable home-based business with little investment of time and money?’ The idea of developing a home-based business is based on the need to find an extra source of income, which in the future may become your main source of income.
A profitable business is one where profits exceed 60%, 80% and up to 100% or more than the value of the investment. So for starting a company to have the capacity to provide a considerable source of income, it also needs a considerable investment. The steps below are for you start a profitable home-based company which does not require much investment at first.
Identify Your Reasons for Starting a Company
Answering why you willing starting a company is the first thing you should do. Is it about being your own boss, earn extra money or depend on your own schedules? Be careful because with your own business, you will not only have one boss but each of your clients will be one of your bosses.
Analyze Your Personality
Do you have the qualities to have your own business? Unfortunately, not everyone has it. Ask yourself the following questions to determine it;
- Do you have what it takes to be the leader of a company?
- Do you like making decisions?
- Do you like competing?
- Do you have the power of self-discipline?
Acknowledge Your Skills
For starting a company, it is ideal to start with an activity that you like or where you excel and where you have some experience. You will be the one to do the work, and what better could be to bet for an activity in which you develop well and safely, or in which you want to invest time and money with consistency.
Define a Clear Concept
Make a unique business concept for starting a company. A business has to have spirit to have something unique that makes it what it is. When starting a company from home, despite being smaller, the idea applies equally, so you must define a concept of your business which explains what the business is all about.
Evaluate the Idea & Calculate the Investment
Write on a paper the activities you can carry out and which you think you can market in your locality or on the internet.
- Describe the product or service you are going to sell.
- Analyze your market and evaluate the needs and desires of your potential consumers.
- Set the price of your product or service.
- With each activity you wrote, value the investment of materials or expenses and the percentage of profitability.
