Limit Your Business’s Liability the Easy Way
If you have a business, are starting one, or are even thinking about starting one, you should be considering setting it up as an LLC. An LLC, or Limited Liability Company, is a business structure similar to that of a typical corporation, but it is much easier to start and maintain. An LLC is a great way to establish your credibility to your customers and vendors. Other business owners will see that you took the extra steps to make your business more legitimate. Here are a few reasons why creating an LLC is important.
Shielding Yourself from Liability
As its name implies, owners enjoy limited liability. This means that the LLC creates a wall that separates the owner’s personal assets, such as their home, bank accounts, or stock portfolios, from potential business issues, like lawsuits or creditors. The only assets people can go after are those held by the LLC.
LLCs can also be a source of tax advantages. Unlike larger corporations, LLCs are not considered to be a distinct entity for tax purposes, also referred to as a “pass-through entity”. There is no requirement to file a tax return for your LLC. Instead, you and any other owners would report yearly earnings or losses on personal tax returns, the same way you would for a sole proprietorship or a partnership. There may be other specific ways to set up your LLC for tax purposes, such as limiting individual liability for payroll taxes. Speaking with a lawyer would be the best way to identify the best structure for your individual business needs.
Simple Set Up
Creating your business under other forms of corporations can give you similar benefits but are harder to establish and maintain. Many corporations require the entity to meet certain state-imposed standards and requirements. Such requirements include creating lengthy documents establishing a board of directors, holding annual meetings, and other requirement that can be onerous and costly. Establishing an LLC is far easier and cheaper. The most complicated part is generally the operating agreement, which spells out the rights and responsibilities of each owner. This document does not have to be too complicated, and your lawyer will be well suited to structure this document according to your business’s needs.
It is best to contact a lawyer to help you set up your LLC. Lawyers have the knowledge and resources to ensure you get the most out of your business structure. Seeking professional help will also ensure that your business will properly go through all of the appropriate steps to successfully become a valid LLC. The Attorneys in Long, Knight, Huff-Harris, & Hagen, P.C.’s Business Law group are experienced and well versed in entity formation and will assist you in effectively establishing an LLC or any other entity that would fit your business’s needs.
Contact us today to discuss your business’s needs.