Benefits Of A Limited Liability Company

You’ve reached the point where you’re able to start your own business. Now you must decide what type of business entity you should create. One option you have is to form a limited liability company, or LLC.

A limited liability company can be a great choice for small businesses. However, each business entity has its own benefits to take into consideration. Here are some benefits a LLC can offer:

• Easy setup – Compared to other business entities like corporations, LLCs do not cost a lot to set up. And to set up, members only have to file “articles of organization” with the Secretary of State and pay a fee. The articles of organization just include the basic information for your business like its name and its members.
• Creating a separate entity – Unlike a sole proprietorship or partnership, a LLC becomes its own entity and provides all members with limited liability. This means that the LLC takes on liability instead of the owners and members. If your company has debt or faces a lawsuit, creditors can only go after the company assets. Limited liability protects your personal assets.
• Tax options – You have flexibility for your taxes with your LLC. Normally, LLCs have pass-through taxation. This means the IRS does not consider the business to be a separate entity. You pay taxes through your personal income tax. However, if you would pay less taxes as a corporation, you have the choice to classify your business as a corporation with the IRS. This flexibility gives you options for paying the lowest tax possible.