Organizations Relationship Types in USA Topics Business Structures in the US Types of Relationships between Companies Office Management Glosary Business Structures in the US Sole Proprietorship General Partnership Limited Liability Partnership Limited Partnership Limited Liability Company Business Corporation Business Structures in US Sole Proprietorship It’s not considered as a legal entity. Permits needed to run business under other name. Personal Taxes. Major risk is that personal assets counts to cover obligations. Business Structures in US General Partnership It’s not considered as a legal entity. Legal agreement it’s not mandatory. Needs two or more partners. Permits needed to run business under other name. Personal Taxes Major risk is that personal assets counts to cover obligations. Business Structures in US Limited Liability Partnership - LLP It’s considered as a legal entity. Partners are exposed to liability. In some states Partners are shielded to Partnership debts and obligations. In other states Partners are not liable of other partners’ wrongful acts but they are to debts and obligations. Regulated by state laws, need permits to operate in other states. Partnership Income Taxes. Can only get loans, can’t receive outside investments. Can’t be a subsidiary but can have subsidiaries. Business Structures in US Limited Partnership - LP Can have General Partners and Limited Partners. GP same rights, LP limited base on their % investment. It’s considered as a legal entity. Partners are exposed to liability. In some states Partners are shielded to Partnership debts and obligations. In other states Partners are not liable of other partners’ wrongful acts but they are to debts and obligations. Regulated by state laws, need permits to operate in other states. Partnership Income Taxes. Can only get loans, can’t receive outside investments. Can’t be a subsidiary but can have subsidiaries. Business Structures in US Limited Libility Company - LLC Can be run by one or many members. A member can be a manager without losing their member rights. Offer same liability to members like LLP. Pay Corporation Taxes and Capital Taxes. Can get loans and outside investments. Can own other LLCs Business Structures in US Business Corporation Investors are not liable of Corp Obligations. The corporation has perpetual existence. Capital can be raised by selling stocks and securities. The corporation has centralized management so the investors do not have to become involved in the day-to-day operations. It is subject to "double taxation"-that is, the corporation pays a tax on its income when earned, and its shareholders pay a tax on the income when it is distributed to them. Types of Relationships Between Organizations Basis of Comparition Branch Subsidiary Franchies Meaning Branch implies an establishment set up to by parent company, to perform the same business operations, at different location. Subsidiary company is understood as the company whose full or partial controlling interest is held by another company. A business agreement between a parent company and a small business. Reports to Head office Holding company Holding company Business Branch conducts same business as parent organization. Subsidiary may or may not conduct same business as parent organization. Branch conducts same business as parent organization. Separate legal standing No Yes Yes Ownership interest The parent organization has 100% ownership interest in the branch. The parent organization has >50-100% ownership interest in the subsidiary. Variable according to agreement Liabilities Extends to the parent company. Limited to the subsidiary. Limited to the subsidiary. Associate / Affiliate When holding company owns less than 50%, holding company have influences but not control. Office Management Glosary Centralized Office Is a place where company leaders work and make key strategic decisions in operating the company. Can be anywhere Registered Office State laws require a corporation to maintain a registered office in the state of incorporation. Needs to be in the same state that operates. District or Regional Offices The regional office is under the supervision of the main office, and must update it about its activities and progress through reports and other business communications.
