Creating Giant Size by Operating Within the Law

Small business is clearly defined as a company, partnership, or singular sole proprietorship which has less than five employees and less than one thousand dollars in annual revenue; and have no outlets or public customers. The definition of “small” for qualifying for government assistance and qualify for favorable tax treatment varies greatly by industry and country. One of the biggest factors considered by the Internal Revenue Service in determining eligibility for small business tax benefits is the percentage of ownership or equity held by the company. Owned or controlled by an individual, a corporation is considered a small business while a partnership is treated as such if more than half of the partnership’s shares are owned or controlled by the individual or entities supporting the partnership. Some types of small businesses are also able to use various strategies to reduce their tax obligation, including working capital options, use of tax liens and partnerships, among others.

There are two types of small businesses, medium-sized and large. A medium-sized business is a type of small business, which sells products and services that meet the requirements of consumers and can generate enough revenue to satisfy the needs of creditors. Medium-sized businesses can be either privately owned and operated or publicly traded. Examples of medium-sized businesses include groceries, supermarkets, medical and drug stores, hotels, restaurants, and other small retail establishments. Large medium-sized businesses are manufacturing corporations, professional firms, labor unions, oil refineries, and other large companies with sales of at least a few billion dollars.

Large medium-sized businesses have several advantages. They have sales of at least a few billion dollars per year, making them strong contenders for tax breaks and incentives. They have established themselves as legitimate enterprises with a wide range of customers and they have established themselves as key players in the local and national economy. They also have a well-developed internal staff that makes it easy to recruit qualified employees. Large medium-sized businesses usually hire new employees on a permanent basis, which ensures job continuity.

The small businesses fall in between the large and medium categories. They may have fewer sales than the giants, but they can still compete favorably on several fronts. Some factors contributing to this situation include: having fewer total employees, being located in a geographically compact area, having fewer total employees, being located in a state with a low cost of living, and having fewer total sales than the giants.

When conducting business under a limited liability company (also known as an LLC), many small businesses are surprised to learn that their credit scores are lower than those of giant corporations. This might be surprising to small business owners, because in theory, small businesses should be able to obtain the loans they need and retain the workers they need to stay profitable. What many small business owners don’t realize is that although they are required to maintain a minimum balance on their accounts, they don’t have to submit to annual credit checks or to do anything that would cause their credit scores to be lowered. All they have to do is simply to report their income each quarter to the IRS, and the credit scores reflect the activity, not the account balances.

There are numerous ways to cultivate a small business into a giant. It can be as simple as starting with less sales than the competitor, by focusing on a niche market or on expanding the brand name. But for those who want to create such giant, there are other measures besides a smaller staff. There are legal ways to prevent creditors from taking legal action, to reduce taxes, to get more credit cards and loans, to obtain more investment capital, and even to reduce the liability of joint ventures. Whatever the means used to create a giant, the key is that the company operates within the framework of a limited liability company, operating within the framework of the law, keeping credit scores low so that larger clients will consider financing, and growing the business until it reaches a point where it becomes a giant in its own right.

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