Reasons to Start a Limited Liability Company (LLC)

Starting a limited liability company, also known as an LLC is a lot less complex than it sounds. It is especially easy if you are already running any business as a partnership or sole proprietorship, irrespective of how small the business is. LLCs are usually quite flexible, given that you can use them for almost any purpose. However, you need to work with recommended LLC services. LLCs  provide numerous benefits, more than what other entities offer. Some of the top reasons to start a limited liability company are highlighted below.

Protection from Liabilitybusiness finance

Starting an LLC means that your business will be considered as a separate and legal entity. That means that liabilities will fall to the company as opposed to your personal assets. Any lawsuits made against the business by your creditors will also not affect your personal belongings.

More Taxation Options

Typically, LLCs can choose how they get taxed, which comes with numerous benefits for the business. By default, the taxation option used is usually similar to a sole proprietorship. That means the business income flows through the company before being claimed on the owner’s personal returns. Alternatively, the LLC can choose to be taxed as a corporation. That option means you can reduce your tax burden significantly.

Flexible Business Structure

An LLC can provide more options than corporations regarding how the business is funded and how it functions. For corporations, several formalities must be met. Such include appointing officers, having a board of directors, holding shareholders’ meetings, and more. With an LLC, you can change the managerial structure, change ownership roles, amend formation documents, and many more. You can make all those changes at any time as long as the right steps are followed.

Simple Formation and Maintenance

In most states, forming an LLC is usually a lot easier than a corporation. That is because the information needed to form an LLC is generally less than for a corporation. The same also applies to the maintenance requirements. Ideally, the main requirement is usually filing the annual report on statement

Credible and Legitimate

General partnerships and sole proprietorships usually struggle to gain credibility from their customers or clients. Most of them lack professionalism as they operate under the personal names of the owners. By starting an LLC, you can choose a suitable business name, to which you will have exclusive rights. That indicates to your customers that your business venture is more serious and legitimate, resulting in increased credibility.