Best Reasons to Choose to Form an LLC
The advantages of choosing to form an LLC are impressive and rewarding. You can look forward to these benefits, even at the start of your formation.
After all, as an LLC, you can customize your business. It can just be you, two people or more. You might even choose to have silent investors to support your business financially. Many states in the US allow this.
Another significant benefit of being an LLC is that it is legally separated from your assets, estate, and real estate. This means that, in the event of getting sued or bankruptcy, complainants and creditors, among others, can’t go after your assets, estates and real estates.
Being an LLC is also an excellent way to limit your tax burden. An LLC is a pass-through business. Any profit or loss it makes is passed on to its members/ owners. So, in times of profit, the members pay a higher tax (and not the LLC). In times of losses, their tax responsibilities are reducing.
These are different from being a corporation. In corporations, shareholders are double-taxed. The company pays its taxes. At the same time, shareholders have to pay for any profit they enjoyed from a corporation.
Another good reason to choose to become an LLC is to protect your intellectual property. With an LLC, you can keep your intellectual property within that LLC. Your operating company can lease the intellectual right of, say, a product from your LLC.
Lastly, with an LLC, you can raise funds from small investors quickly. There are benefits to putting in some funds in a new LLC. As a pass-through business, you investors can use the LLC’s losses as a tax-deductible item.
How To Form an LLC Today
Ready to form an LLC? Let’s get started!
There are five easy steps to follow when forming an LLC:
- Form an LLC through these Easy Steps
- Choose a unique yet appropriate business name for your LLC.
- Assign a Registered Agent for your Service of Process.
- Get your paperwork ready, including your Articles of Organization; and then pay the necessary fees.
- Put together an operating agreement that includes the roles, rights, and responsibilities of each member.
- Some states require that LLCs publish a notice of their formation. So, get this ready if your state requires it.
- Acquire the needed permits and licenses to operate for your line of business.
There you go – you have formed your LLC! Start growing your business.