Legal entities are structured in such a way as to allow a higher level of protection of purely personal property from prosecution and regulatory sanctions. Each type of business offers different tax protections and burdens. The term “legal person” is often used in the field of business law. You need professional legal advice to make this decision, but the first step is to learn what the different structures are, depending on your situation, long-term goals, and preferences. The information contained on this page should not be considered as a substitute for the advice and services of a lawyer and tax professional in deciding on the structure of the business. Compliance and legal operations teams must approach the management of these entities from an entity governance perspective. This means keeping a strategic eye on all business requirements and being able to predict the downstream effects of changes in regulations or responsibilities. Taxation (C-Corp): For federal income tax purposes, a C-Corp is recognized as a separate taxable entity, so the business files its own tax return (Form 1120). A C corporation is subject to corporate income tax on all corporate profits (the corporation pays taxes).
Shareholders pay personal income tax on corporate profits distributed by the corporation to the owners. As a result, C-Corps are subject to “double taxation”. In Italy, trade unions have legal personality, as provided for in Article 39, paragraph 4, of the Constitution: since legal personality is a prerequisite for legal capacity (capacity of any legal person to modify (contract, transfer, etc.) its rights and obligations), it is essential that an international organisation be able to sign international treaties in its own name. A type of business entity owned and managed by a person – there is no legal distinction between the owner and the business. Sole proprietorships are the most common form of legal structure for small businesses. A corporation is a legal entity that operates under state law and whose scope of activity and name are limited by its articles of association. The articles of association must be submitted to the State in order to incorporate a company. Shareholders are protected from liability, and shareholders who are also employees may be able to enjoy certain tax-free benefits, such as health insurance. There is double taxation with a C corporation, first by income tax and then by shareholder dividend tax (such as capital gains). In the common law tradition, only one person could have legal rights.
In order for them to work, the legal personality of a company has been established to include five legal rights: the right to a common treasure or safe (including the right to property), the right to a corporate seal (i.e. the right to conclude and sign contracts), the right to sue (to enforce contracts). the right to hire agents (employees) and the right to enact laws (self-government). [19] The two types of companies are C-Corps and S-Corps. The main difference between the two types of corporations is the tax treatment of the two corporations: Limited Partnership: A Texas Limited Partnership is a partnership formed by two or more persons and has one or more general partners and one or more limited partners. The limited partnership works in accordance with a written or oral partnership agreement of the partners on the affairs of the limited partnership and the conduct of its affairs. Although the partnership agreement is not filed for the public record, the limited partnership must file a certificate of incorporation with the Texas Secretary of State. The Secretary of State will provide a form that meets the state`s minimum legal requirements. The online submission of the training certificate is done via SOSDirect. Liability: LLC members are protected from personal liability for debts and business claims, a feature known as “limited liability.” If a limited liability company owes money or faces a lawsuit, only the assets of the company itself are threatened.
Creditors cannot access the personal property of LLC members except in cases of fraud or illegality. LLC members should exercise caution so as not to “break the corporate veil,” which would expose members to personal liability. For example, LLC owners should not use a personal checking account for business purposes and should always use the LLC trade name (rather than the owner`s individual names) when working with clients. Taxation: An LLC is considered an “intermediate unit” for tax purposes. This means that business income through the corporation goes to LLC members who report their share of profits or losses on their individual tax returns. The LLC entity is only required to file an informative tax return that resembles the character of the partnership. Single-member LLCs are authorized to report business expenses on Form 1040 Schedule C, E or F. LLCs with more than one member typically file a 1065 Declaration of Partnership form.
According to Indian law, “shebaitship” is the property belonging to the deity or idol as a “legal person”. People who are destined to act in the name of divinity are called “shebait”. A shebait acts as guardian or guardian of the deity to protect the right of the deity and fulfill the legal duties of the deity. Shebait is similar to a trustee if the deity or temple has a legally registered trust or legal entity. According to Hindu law, goods given or offered as rituals or gifts, etc. absolutely belong to the deity and not to the shebait. The case studies are “Profulla Chrone Requitte vs Satya Chorone Requitte”, AIR 1979 SC 1682 (1686): (1979) 3 SCC 409: (1979) 3 SCR 431. (ii)” and “Shambhu Charan Shukla vs Thakur Ladli Radha Chandra Madan Gopalji Maharaj, AIR 1985 SC 905 (909): (1985) 2 SCC 524: (1985) 3 SCR 372”. [24] Partly on the basis of the principle that corporations are simply organizations of individuals, and in part on the basis of the history of the legal interpretation of the word “person,” the U.S.
Supreme Court has repeatedly held that certain constitutional rights protect corporations (such as corporations and other organizations). Santa Clara County v. Southern Pacific Railroad is sometimes quoted for this statement because the court reporter`s comments included a statement by the Chief Justice made before the hearing began, telling counsel during pre-trial preparation that “the court does not wish to hear arguments as to whether the provision of the Fourteenth Amendment to the Constitution, which prohibits a State from denying equal protection of the law to any person within its jurisdiction applies to such corporations. We all agree that this is the case. A hybrid between a corporation, a general partnership and a sole proprietorship. The owners of an LLC are called members. Members can be individuals, corporations, other LLCs and foreign corporations. Most states allow a single-owner LLC, called a “single-member LLC.” Legal persons do not manage themselves. Whether you manage multiple entities or have only one to consider, entity management and governance is paramount to your compliance status. Registered trade unions are legal persons.
They may, by uniform representation proportional to their members, conclude collective agreements binding on all persons belonging to the categories specified in the agreement. Legal personality allows one or more natural persons (universitas personarum) to act as an entity (legal person) for legal purposes. In many jurisdictions, artificial personality allows this company to be considered legally distinct from its individual members (for example, in a corporation, its shareholders). They can sue and be sued, enter into contracts, incur debts and own property. Companies with legal personality may also be subject to certain legal obligations, such as the payment of taxes. A company with legal personality may protect its members from personal liability. In legal proceedings involving animals, animals have the status of “legal persons” and humans have a legal obligation to act as “loco parentis” for the welfare of animals, as a parent does to minor children. A court ruled in 2014 in the case “Animal Welfare Board of India vs Nagaraja” that animals are also entitled to the fundamental right to liberty enshrined in Article 21 of the Indian Constitution[23], i.e.
the right to life, personal liberty and the right to die with dignity (passive euthanasia). In another case, a court in the state of Uttarakhand ordered animals to have the same rights as humans. In another cow smuggling case, the High Court of Punjab and Haryana ordered that “the entire animal kingdom, including species of birds and aquatic animals” should have a “separate legal personality with the corresponding rights, duties and responsibilities of a living person” and that humans be “loco parentis” while setting standards for animal welfare, veterinary treatment, food and shelter, for example. Wagons hauled by animals must not have more than four persons and carriers must not be loaded beyond the established limits, and these limits must be halved if the animals are to carry the load on a slope. [22] The owners of an LLC are referred to as “members”. A member can be an individual, a partnership, a corporation, a trust and any other legal or business entity.