What Is a Shipping Company?
A shipping company is an entity that shipping company facilitates the transfer of items from where they are manufactured to where they are expected to end up. The simplest definition is that they connect raw materials to manufacturers or manufacturers to their retailers.
In addition to arranging transportation, a shipping company is responsible for documentation and customs clearance. They also know ports backwards and forwards so they can advise on possible currents, drafts or wind flows that might affect the maneuvering of ships at ports.
Partnership
Partnerships are a great way to get into business because they are simple and low-cost. However, they have disadvantages such as the need for careful planning and the possibility of conflicts between partners. One of the benefits of owning a Partnership is that you share profits with your partner, although this can be tricky since it depends on what each person contributes to the company. These examples are automatically generated from online sources and may not reflect the opinion of Merriam-Webster or its editors.
Sole Proprietorship
Many small businesses operate as sole proprietorships. This type of business structure is easy to start and has the least amount of paperwork. However, it is also the riskiest for entrepreneurs. A major disadvantage is that the owner is personally liable for all of the company’s debts, liabilities and losses. This means that if the business is sued, creditors can seize the owner’s personal assets, including bank accounts and investments. It is also difficult for sole proprietors to raise money because they cannot sell stock.
Another downside is that customers and vendors often view sole proprietorships as less professional than a company that is organized as an LLC or corporation. However, if an entrepreneur is determined shipping lithium-ion batteries internationally to grow his or her small business, this may not be an issue.
Because a sole proprietorship is unincorporated, it does not have to pay income taxes on its profits. Instead, the profits or losses are reported on the owner’s personal tax return. When the business is sold, the owner can only sell the company’s assets, which excludes any goodwill or intellectual property. The only exception is if the business has a trademark or trade name, which can be transferred to the new owner. However, the buyer would still need to file a fictitious name application. Therefore, the new owner would not be able to use the business name that was originally filed by the sole proprietorship.
S Corporation
An S corporation is a pass-through tax entity with the advantages of limited liability and the ability to have multiple shareholders. However, the IRS requires S corporations to maintain strict tax qualification rules with respect to elections, consents, notices, stock ownership and filing requirements that can be difficult to navigate. Additionally, taking money out of an S corporation requires careful characterization for tax purposes—as compensation, dividend or loan—and may require W-2 forms and payroll taxes to be paid.