An LLC presents the benefits of having a partnership and a corporation, without any of the negatives of either. This is generally is the best structure for most small businesses and should be a consideration if you are a business owner. An LLC offers a lot of benefits for a typical company.
Following are just five of the many reasons why a limited liability company could best for your business:
1. Personal asset protection – Most likely the most powerful reason to forming an LLC is to benefit from the personal liability protection given by a correctly setup LLC. Being a business owner, you are are more likely to be sued then if you were just an employee, so an LLC can be used to shield your personal assets from a lawsuit against your business.
2. Tax choices – If you operate as a sole proprietor, you have very few ways to deal with your business taxes. A limited liability company offers you a variety of separate ways to handle your income taxes, often saving you money compared to what a company with no structure has available.
3. Customer trust – Let’s face it, as a business owner you most likely are competing with a variety of other businesses. You need to make sure that potential customers see you as a real business, and operating as an LLC brings this credibility to your business.
4. Operational simplicity – Creating a corporation is another option that gives you specific personal liability and tax benefits, but they are generally more difficult in their operation. Corporations have annual reporting requirements that limited liability companies don’t, giving the limited liability company an advantage to its ease of operation.
5. Low cost – If you take advantage of a web based incorporation services, the expense to form your LLC will be very little. And generally there are no ongoing fees associate with a limited liability company, which means they are very affordable.
Forming an LLC is an excellent choice for many small business owners, and offers you many benefits that are not available when you have no business structure. Every serious entrepreneur needs to determine if an LLC is the way to go for you.
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