In business today, everyone has heard of the term “busy”, but not everyone is sure what it means. A busier business is simply defined as any organization or company engaged in commercial, manufacturing, or service activities which tend to bring about an increased level of demand. Busiest businesses can also be for profit or non-profitable entities that perform a specific function to meet a specific social cause or further a specific social agenda. Some of the most famous and fast growing companies are Toyota, Southwest Airlines, Apple, and Levi. It may be easy to see why many people feel the need to learn the definition of “busy” and how these companies stack up against other businesses.
One thing all businesses have in common is that they are all involved in some type of debt. Every business, regardless of size, must establish and pay debts in order to keep the business alive and functioning. All businesses must be careful about incurring new debts because the greater the amount of debt a corporation takes on, the harder it will be to discharge those debts in the future. A major concern for most corporations is how they handle their debt. They want to discharge their existing debts and continue to operate their business, but that is easier said than done when the corporation is legally created and operating.
Most corporations and partnerships are considering partnerships. Partnerships are voluntary associations consisting of one or more parties. Partnerships can include any number of different kinds of entities such as corporations, LLCs, S corporations, partnerships, and proprietorship. The most common form of partnership is a proprietorship.
A partnership is created when one or more people combine together to form a company that owns and operates the partnership. In order for a partnership to be considered a successful company, it must have a profit and loss statement, a board of directors, and ongoing meetings with shareholders. A corporation, on the other hand, is created through a written document called a Articles of Organization. Articles of organization usually include a name, capital, authorized shares, and dates of meetings.
Many businesses have limited liability. Limited liability allows an individual to be held personally responsible for his or her own liabilities rather than the property or personal assets of the business. Other types of partnerships include general partnerships, limited liability companies, limited liability partnerships (LLCs), and dissimilar interest relationships (DORs). General partnerships are formed between individuals, corporations, and some kinds of partnerships. Limited liability companies are different from partnerships because they are not controlled by the individuals who own the entity. DORs are corporations that own a DBA, while an LTC is a Limited Liability Company.
Generally, businesses are classified as being a partnership, sole proprietorship, C corporation, and business owned. Partnerships are generally not taxed unless there is income or gain, while sole proprietorships and business owned are both taxed at the individual level. A partnership is only taxed if one of the partners is personally liable for the total costs of the partnership, while sole proprietorships and business owned are taxed all the time. It is important to remember that tax treatment of partnerships and sole proprietorships are very different and should be discussed with a business lawyer or accountant experienced in these areas.