Are you ready to apply for a loan from Pathway Lending? Here are five steps to apply for your business loan today! Two main advantages of structuring your business as a sole proprietorship are the simplicity of incorporation and taxes. Since no formal steps are usually required to set up a sole proprietorship, there are no fees. Owners of sole proprietorships also account for corporate income on their personal income tax return. One disadvantage is that sole proprietorships do not offer legal protection to their owners. There are generally two types of companies: C companies and S companies. Large companies with multiple employees are often structured as C companies, while many small companies choose to organize themselves as S companies. The main difference between an G&C corporation is how taxes are paid. C corporations are taxed as separate entities. The income of an S corporation “flows” into the individual tax returns of its owners. An LLC may choose to treat itself as an S corporation for tax purposes. Check out the following articles for more information on ownership structure: Want to know the other steps to start a business? Read our blog post “11 Steps to Starting a Business in Tennessee or Alabama.” Franchises are not a traditional business structure like those described above.

A franchise is a business that licenses the name, logo, trade secret or other aspect of an existing business. For example, most fast food restaurants are franchised restaurants. In many cases, a person starting a franchise forms an LLC, partnership, or S company, and that company becomes the entity that pays the largest company for the right to use the name. The ownership structure concerns the internal organization of a business entity and the rights and obligations of persons who have a legal or reasonable interest in that entity. As the owner of the business unit, it is important to understand how the ownership structure of a particular business unit is organized and what this means for the rights of the owners. Liability: A corporation is an “immortal” legal entity, meaning it does not end with the death of the shareholder. The shareholders of the company have limited liability because they are not personally liable for the debts and obligations of the company. Shareholders cannot lose more money than the amount they have invested in the company. Like the provisions of an LLC, shareholders must be careful not to “penetrate the corporate veil.” Personal checking accounts should not be used for business purposes and the company name should always be used when interacting with customers. You need professional legal advice to make this decision, but the first step is to learn what the different structures are, depending on your situation, long-term goals, and preferences. Although small businesses can be LLCs, some large companies choose this legal structure.

An example of LLC is Anheuser-Busch Companies, one of the leading companies in the U.S. brewing industry. Anheuser-Busch, headquartered in St. Petersburg. Louis, Missouri, is a wholly owned subsidiary of Anheuser-Busch InBev, a multinational brewing company based in Leuven, Belgium. Can you imagine a situation where ownership of the business unit has become an issue between the founders or co-owners of the companies? What was the basis for the dispute and what was the outcome? Tip: Important factors to consider before liability, tax structure and industry regulations. By creating a list of specific attributes about your company and its founders, you can choose the business structure that`s right for you. Companies are the most complex business structure.

A corporation is a legal entity that is separate and independent of the persons who own or manage the company, namely the shareholders. A corporation has the ability to enter into contracts separate from those of shareholders, but it also has certain responsibilities such as paying taxes. Businesses are generally best suited for large, established businesses with multiple employees or when other factors apply (e.g., the company sells a product or offers a service that could expose the company to significant liability).