Three,amp,#39,Company,#58,How, business, insurance Three's Company: How To Move From Unlimited
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Author's Note:This article is the third in a series by Tax ExpertWayne Davies on the advantages of incorporating your smallbusiness or self-employment activity. Article #1:It Can Happen To You:Why Any Sole Proprietorship Is A Risky Businesshttp://www.YouSaveOnTaxes.com/happen-to-you.txtArticle #2:How To Avoid Double The Trouble:Why A Partnership Can Be Twice As Dangeroushttp://www.YouSaveOnTaxes.com/double-the-trouble.txtArticle #3:Three's Company: How To Move From Unlimited Liabilityto Limited Liabilityhttp://www.YouSaveOnTaxes.com hree-is-company.txt------------------------------------------------------------For the small business owner or self-employed person,both the Sole Proprietorship and the General Partnershipput you in the world of Unlimited Liability.All your personal assets are at risk. A business-relatedaccident or lawsuit could literally wipe you out.How do you move from the world of Unlimited Liability toLimited Liability? By forming a "C" Corporation, an"S" Corporation, or a Limited Liability Company (LLC).For now, I'm leaving the Limited Partnership out of thisdiscussion. I'm assuming that you want a say in theday-to-day management of your business.If so, then both the General Partnership and the LimitedPartnership are not a good Choice of Entity for you.Why is that? Because if your business is a GeneralPartnership, then you automatically have unlimitedliability. And if your business is a Limited Partnershipand you want management control, then you're going to haveto be the General Partner, and again, you'll have unlimitedliability.There are certainly business situations for which theLimited Partnership is a "good fit" (for example, if realestate is involved). But that's beyond the scope ofthis article.So, back to my original question:How do you move from the world of Unlimited Liabilityto Limited Liability? By forming a "C" Corporation,an "S" Corporation, or a Limited Liability Company.Having made such a bold statement, let me also say this:I am a firm believer that when it comes to this Choice ofEntity issue, one size does not fit all!So let me add a strong disclaimer:There certainly are situations where a "C" Corporation, an"S" Corporation, or a LLC is not appropriate.But generally speaking, for many Small Biz Owners andSelf-Employed People, one of these three entities isoften times the best fit.If you want the protection of limited liability, you'vegot to choose one of these three entities. Remaining aSole Proprietor or a General Partnership just doesn't makemuch sense -- you are putting yourself, your family,and all your personally owned assets at risk. Article Tags: Move From Unlimited, Move From, From Unlimited, Unlimited Liability, Limited Liability
Three,amp,#39,Company,#58,How,