Side business opportunity for employees | New Business Ideas

Sole Proprietorship (Sole Proprietor)

The vast majority of small businesses start with a single owner. These companies are in the hands of one person, who is usually responsible for daily operations to function. Sole proprietors own all the company?s values ??and profits generated by it. They also assume full responsibility for any liabilities or debts. In the eyes of the law and the public, you and your business are the same.

Advantages of being a sole proprietor

It is the simplest and cheapest way to hold and organize a business.
Sole proprietors have full control, within the parameters laid down by law, and can make decisions that suit them.
Business owners have all the revenue generated by your business, either to save or for reinvestment.
Business profits flow directly to the personal tax return of the owner.
If so desired, it is very easy to dissolve or wind up the business.

Disadvantages as a sole proprietor

Sole proprietors are responsible for covering all their liabilities and have the legal obligation to pay all debts incurred by your company. Threatens the values ??of both the company and the personal.
May be at a disadvantage in raising funds and often limited to using their personal savings or individual loans.
You can have problems hiring capable or motivated by the opportunity to own part of the business.
Some of the benefits for their employees, insurance premiums as medical expenses are not directly deductible from business income (only partially deductible as an adjustment to income).

SOCIETY (Partnership)

In a partnership, two or more people share ownership of a single business or enterprise. Like sole proprietorships, the law does not distinguish between the company and its owners. Members must have a legal agreement that establishes how decisions will share the cash, resolve disputes, or admit new members enter, buy the actions of an outgoing partner, or what steps should be followed to dissolve the company if necessary . Yes, it?s hard to think about the ?solution? when it just starts a business, yet many companies are separated into hard times and unless you have defined a process, more problems arise. They must also decide from the outset how much time and invest capital each partner, and so on.

Advantages of a society

Partnerships are relatively easy to establish, but we need to invest time in establishing the contract of society.
With more than one owner, it is possible to increase the ability to raise funds or financing.
Profits from the business flow directly to personal tax returns of each partner.
A prospective employees can call attention to work for the business if given the incentive to become partners.
The company generally is benefiting from the complementary strengths of each partner.

Disadvantages of a society

The partners are individually and collectively responsible for the actions of the other partners.
Profits should be shared with others.
Because shared decision making, it is likely that disagreements arise.
Some benefits are not deductible as employees of the company?s income statements.
The company has a limit of life may be terminated due to retirement or death of a partner.

Types of companies to consider:

1. General Partnership

The partners share responsibility for managing risk, in addition to sharing profits or losses according to their internal agreement. All have the same number of shares, unless there is a written agreement that states otherwise.

2. Limited partnership and limited liability partnership (L L P).

?Limited? means that most members have a limit on personal responsibility (to the extent of their investment), as well as input from management decisions, prompting investors to participate in short-term projects or invest in capital goods. Since the establishment of a limited liability company is more complex and formal than a general partnership, business or retail service providers prefer not to use this model.

3. Joint venture (Joint Venture)

This type of company functions as a general partnership, but their establishment and operation are clearly limited to a specified period or for a single project. If partners in a joint venture to work together again in the same activity, they will be recognized as an ongoing partnership, which will be declared as such and to dissolve the accumulated assets should be distributed by it.

CORPORATIONS

A corporation, governed by the laws of the state that has established its headquarters, is considered by law as an entity separate and apart from their owners. A corporation may be subject to payment of taxes, be sued and to establish contractual agreements. The owners of a corporation are its shareholders, who elect the board members to oversee the major policies and decisions of the company. The corporation has a life of its own and does not dissolve in case they change owners.

Advantages of a corporation.

Shareholders have limited liability with regard to debts or judgments against the corporation.
Generally, shareholders are only responsible for the investment in company stock. (However, it is important to note that managers may be subject to liability for their actions, and not withhold and pay employee taxes).
Corporations can raise additional capital through the sale of shares.
A corporation can deduct the cost of benefits (benefits package) that provides its managers and employees.
If you meet certain requirements, may be inclined to declare as an S corporation This selection allows the company to be subject to a tax similar to that of a society.

Disadvantages of a corporation

The incorporation process requires more time and money than other forms of organization.
Corporations are monitored and subject to rules of entities: federal, state and some local, and therefore may have to meet many more requirements and administrative documents to demonstrate compliance.
The incorporation of a company could result in paying more taxes. Dividends paid to shareholders are not deductible as a business expense, so that such income may be subject to double taxation.

Sub chapter S corporations Type

Only a selection for the payment of taxes, this option allows a shareholder to consider your income and gains as profit-sharing thus allowing reported directly on your personal income tax. The particularity of this situation is that if the shareholder works for the company and whether it leads to a gain should also be paid a salary, which must meet standards of ?just compensation.? This can vary according to geographic region, as well as its occupation, however the basic rule is to pay the same as you would pay to a third party to conduct its work, provided there is enough profit. Otherwise, the IRS [Internal Revenue Service U.S.] can reclassify all revenues and profits as wages, which lead to you being responsible for payment of taxes on the amount of your payroll.

LIMITED LIABILITY COMPANIES (L L C)

A limited liability company is a company with a relatively new hybrid structure, which is now recognized in most states. And it?s designed to offer the features of a limited liability corporation, while enjoying the tax efficiency and operational flexibility of a society. Although their training is more complex and formal than in the case of a general partnership.

The owners are members and the duration of an L L C is usually determined when presenting the documents of the organization. If desired the maturity period can be extended through a vote by the members making up at maturity. An L L C can not have more than 2 features of the four possible by defining the corporations. Limited liability in terms of total assets, the ability to extend the maturity date, centralized management and free transferability of ownership interests.

In short, we need to consider carefully all the information before deciding which model property for your needs. Use the services of its key advisory for help in this process.

Source: http://www.hlynur.info/side-business-opportunity-for-employees.html

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