You’ve had the entrepreneurial bug for a while now. You’re finally ready to take the plunge and start your business. How do you begin?
You may have heard or seen the phrase “LLC” or “Limited Liability Company” in your preliminary research. But what is it? Is establishing an LLC the best for your new business?
There are a variety of reasons people opt to form an LLC. A few of the potential benefits include:
- Low costs – Most methods of forming an LLC involve low costs.
- Easy to form – There are relatively few forms and documents involved in setting up an LLC.
- Flexible tax structure – In an LLC, you can choose which tax structure you prefer.
- Business liability protection – Your personal assets are not tied into the company. This means members of the LLC do not have to worry about creditors coming after their personal property if the business goes into debt.
These are just a few reasons people establish this type of business. There are multiple benefits, but there are also some downsides to LLCs.
A few of the negative aspects of an LLC are:
- Protection limits
- Member turnover can lead to dissolution
- Self-employment taxes
No two business are alike. Because of this, there is not a blanket way to start one. Putting in the time and effort to think about what is best for you and your future company is worth it in the end.
An LLC may or may not be the best option for you. This is just a brief explanation of LLCs and their pros and cons. Consulting with a business attorney could help you make the decision and start your business on the right foot.