Incorporation and the Formation of Partnerships
The business world can be quite a competitive place and just like any competitive place there are winners and losers. One of the key elements in any business success is having a strong business plan. A business plan is a blueprint or map for any business and represents a systematic approach to analyzing the strengths and weaknesses of the business and planning strategies to overcome these weaknesses. Businesses that are well-prepared and have clearly defined objectives and goals lay the foundation for future growth. Understanding what a business plan is and why you need one, is essential if you are looking to start a business of your own or want to expand your current business.
Define Business Organization. A business organization is characterized as an enterprise or group of people who endeavor to promote the common good or the achievement of social or communal objectives. A business organization is also defined by the systematic efforts and actions of people to develop and create goods and services for social gain and to create jobs. The products of such organizations are intended to promote the common welfare of people in general, society at large, and specific groups of people or communities. Business activities may include: marketing, research and development, sales and service, and production.
Create a Nonprofit Organization. A business structure that incorporates a nonprofit organization brings in a number of benefits which can be very lucrative. First of all a nonprofit organization has its own benefits – it has no debts or financial commitments other than those it incurs from its own activity. In addition, when establishing a nonprofit organization, it is easier to set up the required level of service, management, and profit sharing because the contributions of members are tax deductible.
How do I Choose? Creating a non-profit organization will require that you pick a name that reflects the area of interests of your organization. As long as you pick a name that is unique, the name of your business organization should not be used by any other company. The reason for this is that you want to distinguish yourself from the other nonprofit organizations in your area, and people will tend to associate your non-profit with special services it offers, and not with the name of a regular business organization. Once you have picked a suitable name for your new business, the next step is to register it with the appropriate government agency.
Incorporating a Business with a Limited Liability Company (LLC): Most businesses that are set up as partnerships with other companies are treated as for-profit organizations in their state. To be able to incorporate a business as a non-profit corporation, the owners must file an annual Form 1 with the state, listing the LLC as the primary agent for the business. The primary agent must be a person who has been authorized by the state to act on behalf of the LLC.
There are many businesses that can benefit from incorporating as partnerships. These types of businesses include educational institutions, companies that provide services to the community, franchises, churches and other non-profit organizations. If you choose to incorporate a business as a partnership, remember that you are forming two separate legal entities, one of which is a partnership and one that is a corporation. If you choose to incorporate your business as a corporation, then you are creating two separate entities which are separate from each other, with one being considered the public’s entity and the other being your private entity.