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Find out how to syndicate your content with Upwork. Being a business owner is difficult, you are responsible for everything from the finances to the finishing touches on packaging or services. With all of this hustle and bustle, it is easy to let some critical tasks fall through the cracks. One of such tasks is forming a legal entitya topic of much confusion and unnecessary stress. Did you know that if you have not formed an entity that protects your business and your personal assets, you are putting everything at risk?

By default, if you have not formed a legal entity, you are operating as a sole proprietor or a general partnership if you have partners. There are some advantages to operating as such: Citizen or resident to be an owner, there is no limit placed on the number of partners that you can have, you can report business profit or loss on your personal tax returns, and you are not required to hold annual meetings or record meeting minutes. However, the disadvantage of these entities is dire — you do not have protection from the liabilities.

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This means that if someone sues you and wins, they can take your personal assets such as your car or your home. Therefore, Free Spin Casino Xanthigen Proprietary Maryland Best Live Casino Poker Rooms is usually not recommended that someone does business as a sole proprietor or a general partnership because these entities do not protect the personal assets of his or her owners.

We will now discuss each type of legal entity and the advantages and disadvantages of each so that you can make an informed decision. The second and very popular legal entity that you should consider for your business is the LLC. This is very beneficial and desired because it may keep you from losing your car or home in the case of someone winning a lawsuit against you. The governing document, the Operating Agreement, outlines how the LLC will be run and the procedure in certain situations e.

In terms of taxes, if you are the sole owner of the LLC, by default, you will be adding the profits and losses of the LLC to your personal income tax return. On the other hand, you can elect to be taxed as a corporation. If the LLC has more than one owner, you will be taxed as if you were in a partnership or you can elect to be taxed as a corporation as well. The LLC itself does not pay taxes but can be subject to an annual tax in certain states such as Delaware.

In short, the LLC Free Spin Casino Comps Chart your personal assets from the liabilities of your business and ensures that you are only taxed once.

The LLC is the preferred legal structure for freelancers because of the limited liability shield and because the up-keep for continuing operating under the structure is not complicated with formalities. C Corporations are legal and tax structures that are separate from your personal assets. The tax structure of this particular entity is as follows: Thus, with a C Corporation, you will be taxed twice.

However, with a C Corporation, there is no limit on the number of shareholders that you have and the shareholders do not have to be U. This is why C Corporations are so popular for large companies that are publicly traded or want to Captain Jacks Casino Bonus Rtg Parts Coupon publicly traded.

If you are a freelancer and are not interested in building a conglomerate that is publicly traded, the C Corporation is not a good choice simply because of the double taxation structure. The last business structure you should consider is the S Corporation. The S Corporation also serves as a shield to your personal assets, thus protecting your home and other personal assets from the liabilities of your business. The S Corporation is only taxed once — the owners report income or loss on their personal tax returns.

In return for this preferential tax treatment, there are limits placed on the number of shareholders and each shareholder must be a U. S Corporations are also a good choice for freelancers as you will only get taxed once. An important thing to remember about corporations is that they require a fair amount of formalities. To prevent this from happening, you must hold annual meetings and record meeting minutes.

You should also have By-laws that specify how the company will be Free Spin Casino Comps Chart. Each of these business entities has their owns pros and cons and you must choose which one is right for your business and your vision. Forming an entity is not overly burdensome or costly, but it goes a very long way toward protecting your personal assets. Let us know if you have any questions about legal entities and what choice is right for you. This story was submitted by Donata Kalnenaite and does not constitute the views or opinions of Upwork.

Upwork is a freelancing marketplace where businesses of all sizes can find talented professionals across multiple disciplines and categories. If you are a business and are looking to get projects done, consider signing up!

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Donata Kalnenaite is a licensed business attorney and the founder of Agency Attorneys. She helps software development, graphic design and marketing agencies, as well as… more.

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Sole Proprietor By default, if you have not formed a legal entity, you are operating as a sole proprietor or a general partnership if you have partners. Sign Up Get Started.

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