Company secretarial services

Compliance and Business Support in the USA

Types of companies in USA

 

One of the most important criteria to classify business entities regards the extent of personal liability upon their owners.

This page lists the main entity forms with unlimited personal liability.

 

1) SOLE PROPRIETORSHIP
The Sole Proprietorship is a form of business organization owned and operated by one individual or a husband and wife. The sole proprietor is ultimately responsible for the operation, management, liability and for all decisions affecting the business.

ADVANTAGES:

-    Ease of formation termination and low cost of formation

-    Minimal expense of formation

-    Sole possession of all profits

-    Flexibility in control and management

-    Freedom from taxation as an organization

DISADVANTAGES:

-    Unlimited liability of the owner for all debts and obligations

-    Limited access to capital

-    Termination of business on death, withdrawal or bankruptcy of owner

No specific filings are required to be made with any state or federal agency prior to the sole proprietor doing business; however, there are some exceptions.

 

2) GENERAL PARTNERSHIP

A General Partnership is a form of business organization owned and operated by two or more persons.  The General Partnership is similar in many ways to the Sole Proprietorship; however, the partnership agreement, which distinguishes it from the Sole Proprietorship, governs the relationship among the partners and the way in which the partnership conducts its business.  This agreement may be written or oral.

ADVANTAGES:

-    Ease of formation and low cost of formation and termination

-    Enhanced access to capital resources

-    Control over who becomes a partner

-    Freedom from taxation as an organization

DISADVANTAGES:

-    Unlimited joint and several liability of each partner of all debts and obligations

-    Non-transferability of partnership interest

-    Termination of partnership on death, withdrawal or bankruptcy of a partner

No specific filings are required to be made with any state or federal agency prior to the General Partnership doing business; however, even here are some exceptions.

Read about entities with limited personal liability

To learn how we can help and support you from the incorporation to the statutory maintenance of your USA company:

 

 

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