When you start a business, there is a wide array of company model options you can choose from. One of them is an LLC which stands for a Limited Liability Company. Over the years, the llc formation service has grown to be popular among entrepreneurs in different industries. If you are wondering if an LLC is the right way for you, here are reasons why you should consider it.
Added Protection for Your Assets
As the name suggests, with an LLC there is limited liability. There is also the legal concept of a corporate veil. This simply means that your company is separate from you and is a legal body on its own. It makes them particularly ideal for an upcoming business especially if you accrue debts. A limited liability company ensures creditors will only go after the company’s assets and not your assets like your car, bank, or home.
Better Taxation
When you go the LLC route, you can choose how you are taxed. For instance, you can choose to be taxed like a sole proprietorship- once at the personal level. With corporations, there is double taxation where there is both corporate and personal tax. An LLC is therefore a plus for upcoming business because they get to save an extra coin by avoiding double taxation.
Flexibility
A limited liability company is way more flexible in terms of funding and management compared to other corporations. With other corporations, there are many formalities like having a board of directors. This means you cannot run your company as you wish. Budgets and other financial decisions for instance have to pass through the board. With an LLC, you get free rein to switch up whatever you want at whatever time. The only requirement is to let the state know about the changes.
Easy to Form and Register
While starting an LLC has its formalities, it is relatively easier to start than a corporation. For instance, all you need to file is your annual reports which are not even a mandatory requirement in all states. Within days, you can have your LLC up and running which is near impossible with other company models.
When you are starting up a business, it is easy to get overwhelmed with all the formalities and requirements. Luckily, there is the option of going for a limited liability company. A limited liability company gives you added protection, better taxation rates, and flexibility. They are also easier to form with minimal state requirements and limitations.
Besides the physical assets like buildings, vehicles, and others, businesses owe intellectual properties vital for the business’s continuity. The intellectual properties include trademarks, product designs, logos, trade secrets, inventions, and others.
Typically, businesses work with legal experts in their formation stages in such matters as incorporation and others. However, new enterprises overlook the necessary legal requirements for the preservation of their status as corporations. There are well-specified state requirements that the businesses need to observe in such matters as holding annual meetings for shareholders, partners, and directors. Other issues include the election of the various officeholders and the documenting of minutes. Non-adherence with the laid down procedures and requirements could result in the loss of protection and expose the officers to personal liabilities and other legal complications. But if a business works with reliable lawyers, they will guide them on such matters hence prevent the issues.