If you’re interested in opening a new business, one of the decisions you’ll need to make is what kind of business entity you plan to open. Entity type affects taxes and liability, as well as State and Federal obligations. At Biddle-Shaw Insurance Services Inc. in San Francisco, CA, California residents can find experts in commercial insurance who can help clarify any questions you may have about how your entity type will impact your commercial insurance needs.
Types of Entities
Some common types of entities include corporations, sole proprietorships, limited liability corporations, and general partnerships.
A corporation is a group of people responsible for managing a company on behalf of the owners. Taxes can be charged to the corporation and the shareholders.
Sole Proprietorship
A sole proprietorship allows one person to own and run a business. That person is responsible for the company and is entitled to all the profits. They must pay all the taxes placed on the industry.
Limited Liability Corporation
A limited liability corporation has a structure similar to a corporation, but it’s taxed differently. One or more people can manage an LLC. Those who manage this type of company must file documents with the Secretary of State describing an operating agreement for the roles and responsibilities of each manager. A copy of that document must be kept by the manager(s.)
General Partnership
A general partnership is a partnership between two or more people. All the partners share liabilities and profits. Business profits are considered personal income. A partnership agreement must be filed with the Secretary of State.
Your Choice for Commercial Insurance
Choosing your business entity type is part of the many business decisions you’ll make when opening your company. For any questions about entity type or commercial insurance, San Francisco, CA residents can put their trust in Biddle-Shaw Insurance Services Inc. Since 1938, we at Biddle-Shaw have made it a priority to establish professional relationships with our clients. Call today for an appointment with one of our commercial insurance agents.
