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Interpreter/ Translator

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Submitted By JUNE2011
Words 1463
Pages 6
If you are considering starting a small business, you may be trying to sort out the different types of businesses and wondering which type is best for you. Each type is best for a specific purpose or situation, relating to taxes, liability, and your ability to control the profits and losses of the business. Sorting out the acronyms can be tricky, but this run-down will help.
1. Sole Proprietorships
A sole proprietorship is a business operated by one individual; the business is considered part of the individual, not a separate entity. The business profits and losses are included on the individual's personal tax return, and the individual retains personal liability for the business debts and lawsuits.
2. Corporations
A corporation is an entity which is separate from its owners. The corporation is formed under the laws of the state in which it is operating, with Articles of Incorporation.
3. Subchapter-S Corporations (S-Corporations)
A subchapter-s corporation (or s-corp) is a corporation which has the benefits of limited liability of a corporation but which is taxed as a partnership, with the income or losses flowing through to the individual shareholders.
4. Professional Corporations (PCs)
A professional corporation is a specific type of corporation for professionals, such as attorneys, doctors, architects, and accountants. In some states, these professionals can form a corporation, but with the distinction that each professional is still liable for his or her own wrongful professional actions.
5. Partnerships
A partnership is a business entity with individuals who share the risk and benefits of business. A partnership may include general partners, who bear the liability for partnership debts and for actions of the partnership. It may also include limited partners who are merely investors and who do not share in the day-to-day operations of the business and

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