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Sole proprietor vs llc colorado
As a legal entity separate and distinct from you as a person, your LLC can do the following: Earn money.
Gov, as well as the federal governments official business website, Business.There is no one answer to the sole proprietor vs LLC issue, but the small business owner is often surprised to hear that in some cases the answer is that it is fine to conduct his business as a sole proprietor.For federal income tax purposes, a C corporation is recognized as a separate taxpaying entity.Well discuss the most important one first.Most states require only a single document - the Articles of Organization - to be filed when forming an LLC.If your company gets sued, only the assets of the business can be used to pay off the LLCs debts.IS the business itself.With a Sole Proprietorship, there is no such protection.
An LLC combines the characteristics cake shop 3 crack of a Corporation and a Sole Proprietorship/Partnership.
Colorado LLC vs Corporation/Sole Proprietorship/Partnership, in this section youll learn why we recommend setting up an LLC over the others.
What do I need to do?Double taxation is paying taxes at the corporate level, and then again at the personal level.Home, lLCs, by abby fine reader 10.0 Steve Aycock, the purpose of an LLC is to allow one or more people to operate a business and have liability protection along with certain tax advantages.For information regarding federal taxes and obtaining an employer identification number (EIN contact the Internal Revenue Service,.gov.It harnesses the best of both worlds.While the limitation of liability is not absolute, it certainly is better in many cases than no protection at all.Now that you understand the different entity types, lets compare them.It builds a wall of protection between your personal assets and the assets of the business.The LLC structure is based on freedom to contract, which means owners operate an LLC by agreement rather than by-laws or rules designed to protect shareholders of a corporation.