When a business is formed, the type of legal entity it will be, such as a corporation or limited partnership, must be decided. That will determine how the firm and its owners are taxed, as well as what individual protection from monetary liabilities the owners are afforded Mary K. Pratt, Computerworld Ratimir Pavesic and Azmina Janmohamed had a clear vision of what they wanted when they launched their Boston-based systems integration company in January. They considered market needs, developed business strategies and crafted a message to position the company's services. But they still needed outside help getting iTrian off the ground. We couldn't be just two people working.
Entrepreneurs have many options when they set up shop.
Business goals, tax laws and the potential for monetary liabilities all factor into taking the right path. It really does come down to a tailored fit for every situation. Consider the corporate entity. Businesspeople who form corporations enjoy individual protection against monetary liabilities that range from unpaid debts to lawsuits. Corporations face double taxation, which means the corporation and the shareholders are both obligated to pay federal taxes on their gains.