I am inspired by the great strides you have made to teach students in the United States auto industry through your firm, Career Institute of America. I am aware that you informed me that you required advice on the limitations of a nonprofit organization as a business entity. Firstly, the whole tax benefits can only be used by businesses that have been established for an educational, charitable, religious, scientific or literary motive. Secondly, it is disadvantageous because if the asset is transferred to the charitable organization, the property must stay with the company. In fact, even if the company dissolves, the property ought to go back to another charitable organization (Find Law, 2018). The Career Institute of America is located in Dallas, Texas.
I understand that you need detailed information on the best business entity to set up in Delaware State. It is recommended that you know the choice that suits you as an entrepreneur from the perspective of legal structure. The guiding factors in selecting a suitable business entity are taxation, liability, appropriateness to a business purpose, ease of operation and formation, appropriates for expansion and ease of termination, sale or dissolution. The most commonly utilized business entity options are sole proprietorships, corporations, partnerships, limited liability companies and nonprofit organizations. The nuances of each necessitate careful consideration and analysis when matched with a certain situation faced by or expected by the business person.
It is important to review, profit corporations, nonprofit organizations, and limited liability companies to determine which is the suitable business entity for you. Profit corporations are somewhat rigid in the way in which they are administered, and particular formalities are required under corporate law. They can still be excellent, if not perfect platform to structure the operation and management of the business, relying on situations. In nonprofit organizations, in case of dissolution of the business entity, the owner will transfer the assets to another charitable organization. In limited liabilities companies, the owners enjoy asset protection, flexibility, less statutory requirements and freedom of contract (Find Law, 2018).
I would advise you to choose a Delaware limited liability company (LLC) as your suitable business entity because it is advantageous than others. LLCs are by the most flexible business entity because its members enjoy broad discretion under the law in crafting, by contract, how the business will be operated. Firstly, the has the freedom of contract because the LLC has an operating agreement which implies that rules and terms of LLC can be tailored to accommodate the specified needs and preferences of an LLC. Secondly, the Delaware LLC enjoy asset protection against creditors. It implies that in case a member of the business entity has a verdict filed against him or her, a creditor is not capable of attacking an LLC or amassing any share of the LLC's assets. Hence, the likelihood of suffering losses due to legal malpractice is less in Delaware LLCs than other business entities (the State of Delaware, 2018).
Various elements are essential for the agreement to be viewed as an independent contractor agreement rather than an employment agreement. Expenses incurred, services offered and compensation provided by the government are some of the elements included in an independent contractor agreement. The terms and conditions regarding the termination of the service are listed in this written agreement. Moreover, another element is the insurance cover by the independent contractor (IC). The IC is required to obtain and maintain insurance premiums to cover any claims of asset damage, bodily injury or losses that might occur ought of negligence (Agreement, 2008). In the governing law element, the rights of the parties shall be managed uniquely by the laws of the nation, without regarding its conflicts of law provisions.
Agreement, T. I. C. (2008). Independent Contractor Agreement. Contract, 401, 723-9500.
Find Law. (2018). Benefits and Drawbacks of Different Types of Business Entities - FindLaw. Retrieved from https://smallbusiness.findlaw.com/incorporation-and-legal-structures/benefits-and-drawbacks-of-different-types-of-business-entities.html
State of Delaware. (2018). TITLE 6 - CHAPTER 18. LIMITED LIABILITY COMPANY ACT - Subchapter III. Members. Retrieved from http://delcode.delaware.gov/title6/c018/sc03/index.shtml
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