DIFFERENT TYPES OF COMPANIES AND COMPARISION

Firstly we talk about the company. A company is any entity engages in business. A company can be made in different ways. Your Company is a sole proprietorship, a corporation, or a partnership. It all depends on the different types of companies you are dealing with. It may be handled by a single person or a group of people. There are various types of companies and if you own it you have to take care of your accounts, income tax return, transfer pricing International transaction, etc.

The owner is personally liable for business debts.

1.       The owner reports profit or loss on his or her personal tax return.

2.       Simple and inexpensive to create and operate. No filing is important.

3.       No formal corporate maintenance is required.

• General Partnership

1.       The owner (partners) personally liable for business debts.

2.       The owner (partners) reports profit or loss on his or her personal tax returns.

3.       Simple and inexpensive to create and operate. No filing is important.

4.       The partners can raise cash without involving outside investors in the management of business

• Limited Partnership

1.                   Limited partners have limited personal liability for business debts otherwise they don' participate in management.

2.                   The limited partnership provides the limited partners a return on their investment.

3.                   It is suitable mainly for companies that invest in real estate.

4.                   The partners can raise cash without involving outside investors in the management of the business.

• Limited Liability Company

1.       It easily combines a corporation's liability protection

2.       IRS rules now allow LLCs to choose between being taxed as a partnership or corporation

3.       More expensive to create than partnership or sole proprietorship.

4.       Sale of member interests may take place per company policy.

• Professional Limited Liability Company

1.       Same advantages as a regular limited liability company. The Members have no personal liability

2.       A single-member PLLC is treated as a disregarded tax entity, the same as a sole proprietor, giving it pass-through tax treatment.

3.       It easily gives the state-licensed professionals a way to enjoy LLC advantages.

• C-Corporation

1.       Owners have personal liability for business debts.

2.       Owners can easily split the corporate profit from owners and corporations, paying low taxes.

3.       They have an unlimited number of shareholders.

4.       Shares of stock may be sold to raise capital

• Professional Corporation

1.       Owners have no personal liability for the malpractice of other owners. Owners have liability for own acts of malpractice.

2.       PCs are granted the taxation benefits of a corporation.

3.       Option when certain states do not allow professionals to form a C-Corp. All owners must belong to the same profession.

4.       Formality requirements like annual reports, minutes, and meetings are required to maintain corporate status.

Read more- CA firms in Delhi