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What is a Partnership?
A partnership is a business owned by two or more people, usually designated as an LLC. They play a role in the operation of the business, and are responsible for the legal and financial liabilities. In a partnership, as in a sole proprietorship, there is no legal shield against law suits and liabilities unless they have filed as an LLC or S-Corp. If the partnership were to be sued, without any kind of legal shield in place, the owners would be held completely accountable. Continue reading...
What is a Limited Liability Company (LLC)?
A limited liability company (LLC) establishes a separate entity from the sole proprietor or partners in a business which shields them from some of the liability associated with the business. An LLC is a business entity that creates a distinction between the business’s assets and liabilities and the assets and liabilities of the owner or partners. Sole proprietors and partnerships who do not file for this distinction leave themselves and all of their personal assets at risk, in the event of a lawsuit or bankruptcy. Continue reading...
If I Want to Establish a SEP IRA, Do I Have to Establish One for All Owners of My Business?
If a business owner is a silent partner, and not an employee, they do not need to be included in the SEP IRA. You have to offer SEP IRAs to all of your employees. If the business owners are not employees of the business, you do not need to offer a SEP IRA to them. If you intend to include one partner but not another, you should take care to ensure that whatever criteria you used to define who is eligible in your plan document will hold up to scrutiny. Continue reading...
What are the Forms of Ownership of a Corporation in the United States?
There are many different forms of ownership of a company in the United States. This subtopic describes some of them. Corporations can be privately held or publicly traded. There are also C-Corporations (C-corps), which are the typically large companies controlled by a board of directors, and S-Corporations (S-Corps), which are smaller and have some of the characteristics of LLCs. LLC is an abbreviation for Limited Liability Company, which is a pass-through entity for partnerships or sole proprietors which shields the private assets of the owners from the liabilities of the business. LLCs are almost entirely regulated by state law, and while they can issue stock, it depends on the state. Continue reading...
What is an Income Trust?
Income trusts are a type of company that has been structured to pass through all earnings to shareholders. A trust is a legal entity, that seeks to use assets in the best interest of beneficiaries. Some pooled investments are categorized as trusts, and they pass all income (and the tax implications) on to investors. Examples include a real estate investment trust (REIT), a royalty trust, a utility trust, or a business investment trust (also known as a master limited partnership, or MLP). Mutual funds can also fall into this category, but they are not necessarily designed just for income. Continue reading...
What are Articles of Partnership?
Articles of Partnership lay out the nature of the agreement entered into by partners in business entity. Also called a ‘partnership agreement,’ articles of partnership plainly describe the nature of the partnership, which partners are General Partners and which are Limited Partners, and other important details. Partnerships can take the form of Limited Liability Partnerships, General Partnerships, and even S Corporations (but those file articles of incorporation instead). Continue reading...
What is active money management?
Active management is when an investor or money manager attempts to outperform an index or benchmark, using tactical strategies. Many economists and financial professionals believe that the markets are efficient. This means that all available financial information has already been built into the prices of securities, and that you cannot outperform the market by making specific selections of stocks, timing the market, reallocating your assets regularly, following the advice of market pundits, or finding the best portfolio managers. Continue reading...
What are Limited Liability Partnerships (LLPs) and How Do They Work?
Dive into the intricacies of Limited Liability Partnerships (LLPs), a unique blend of partnership and corporate structures. Designed to protect individual partners from personal liability, LLPs have become a preferred choice for professionals worldwide. From understanding its foundation to its global variations, this comprehensive guide sheds light on the advantages of LLPs, their management autonomy, and their tax-transparent nature. Whether you're an established professional or venturing into a new business collaboration, discover how LLPs can offer you the benefits of combined expertise, reduced costs, and scalable operations. Navigate the world of LLPs and make informed decisions for your business endeavors. Continue reading...
What Is a Company?
A company, in its simplest definition, is a legally recognized entity formed by a group of individuals to engage in business activities, be they commercial or industrial. It serves as the framework through which entrepreneurial ideas are transformed into tangible ventures that drive economic growth. The structure and purpose of a company can vary widely, with different forms of ownership, legal obligations, and operational methodologies. In this article, we delve into the intricacies of what a company truly is, how it functions, and the diverse types it can take. Continue reading...
What is a Self-Employed 401(k)?
Self-Employed 401(k)s are one of the best ways for self-employed people to save for retirement. Self-Employed 401(k)s function in exactly the same way traditional 401(k)s do, except for a few tweaks. First of all, Self-Employed 401(k)s can only be opened by a business owner or partnership with no employees, although your spouse may also contribute to the Self-Employed 401(k) if he or she works for the business. Continue reading...
What is Off-Balance-Sheet-Financing?
A company might use this maneuver in order to keep their debt to equity levels in check. The most frequently used types of off-balance-sheet-financing are joint ventures, research and development partnerships, and operating leases. Continue reading...
How Do I Invest Money in My Cash-Balance Plan?
Employees do not have control of their own accounts in a Cash Balance plan, but they can possibly influence how much is contributed each year. Contributions to a Cash Balance plan should not be adjusted more than once every few years, but they can be adjusted. In small partnerships without many, or any, employees, there is likely to be more flexibility, or willingness for the owners of the business to jump through the hoops required to have the plan re-worked. Such changes could require a new plan document. Continue reading...
The Best Stocks in Microsurgery
The realm of microsurgery is rapidly advancing, and with it, a select group of companies are emerging as key players. Among these, Medtronic plc (MDT) and Boston Scientific Corp (BSX) stand out as market leaders. In this article, we delve into the financial metrics and market positions of these companies, providing investors with a comprehensive understanding of their potential. Continue reading...
What is a Keogh plan?
Keogh plans are any type of qualified plan at a sole proprietorship or partnership. Keogh plans come in various forms, and this is because they are actually quite a broad category. IRS Publication 560 (found here) divides workplace retirement plans into SIMPLE IRAs, SEP IRAs, and Qualified Plans. This last category, Qualified Plans, includes profit-sharing plans, 401(k)s, 403(b)s, money purchase plans, and defined benefit plans such as pensions and salary continuation plans. Continue reading...
How Can I Establish a Keogh Plan?
A Keogh plan will primarily need a plan document and a way to invest. A Keogh plan can be established by any self-employed individual of a sole proprietorship, partnership, and Limited Liability Company (LLC). A plan document must be put together by the sponsor, or the standard plan document from a prototype plan at a broker-dealer or trustee institution can be used. It is not necessary to submit the document to the IRS, but if you have any employees, it is required that you use this document and any other printed information necessary to fully explain and disclose their rights in regards to the plan. Continue reading...
If I Want to Establish a Money Purchase/Profit Sharing Plan, Do I Have to Establish One for All Owners of My Business?
Sometimes owners have to be included and sometimes they do not. A Money Purchase Plan does not have to be offered to every owner, only those who are considered employees as well. Money Purchase plans are pensions, and pension income is not paid to investors in a business, only employees. Profit Sharing plan contributions must reflect the proportional interest of an owner or employee in the business. Continue reading...
What Are Hedge Funds?
Hedge funds are a specialized form of investment vehicle that has evolved into a multi-trillion-dollar industry, setting them apart from traditional mutual funds. In this article, we will explore the world of hedge funds, their history, key players, and their role within the financial services industry. Continue reading...
The Best Water-Themed Stocks
Water, the most essential resource on our planet, presents a unique and compelling investment theme. This theme is not only fascinating due to its critical importance to life but also because of the diverse range of companies it encompasses. From consumer staples like National Beverage Corp., known for its LaCroix sparkling water, to utilities such as NiSource, and even technology-focused entities like Itron, which specializes in water usage measurement equipment, the water theme offers a broad spectrum of investment opportunities. This diversity means the sector's performance varies across economic cycles, with utilities and consumer staples generally offering stability during downturns, while technology-oriented firms may thrive in periods of economic expansion. Continue reading...
What is an Investment Club?
An investment club can be a term used for a group that organizes itself for the purpose of pooling investment dollars and participating in the market, or for a group that meets for informational and educational purposes. Clubs that actually invest sometimes organize themselves as LLCs and establish a system for how to choose and manage their investments as a group. Even though “investment club” may sound like an informal and relatively unregulated way to invest with pooled assets, they are actually subject to regulation by the SEC. Continue reading...
Evaluating the Drug Theme: A Deep Dive into Top Pharmaceuticals and Biotech Stocks
The 'Drug Theme' encompasses a range of companies focused on pharmaceuticals, biotechnology, and therapeutics, with a strong emphasis on developing substances that have a profound physiological effect. This article analyzes the top three stocks from a distinguished group that includes Eli Lilly & Co (LLY), AstraZeneca PLC (AZN), Pfizer (PFE), and more. Our focus will be on Eli Lilly & Co, AstraZeneca PLC, and Pfizer, considering their significant market caps and contributions to the 'Drug Theme'. Continue reading...