This is a great time to start a business. The economy is improving and there are practically an infinite amount of opportunities to make an income online. Regardless of whether or not you are starting up small and part-time, or have a big idea you are about to implement in a big way, you want to carefully consider the structure of your new endeavor. For many business owners, choosing a limited liability company (LLC) structure is the obvious answer. There are many reasons that LLCs are so popular.
Protecting personal assets
The LLC’s unique structure is a perfect choice for those who operate a sole proprietorship or partnership but require more safeguards against individual liability for debts or lawsuits. That means that creditors will not be able to seize personal assets like your car or home in case issues arise in the business. The only assets at risk would be the assets the business itself has control over.
Simplified tax filing
Small business owners create an LLC because this structure avoids double taxation. Business owners who choose to organize their business as a corporation are taxed twice; first company profits and then when those profits become income for the individual. The LLC structure prevents this issue since profits are classified as owner income, similar to a sole proprietorship.
Changes to the business are easily made
Once the LLC is set up it needs little to no maintenance. In fact, it’s fairly simple to add new partners or sell interest in the entity to another party. Typically, LLCs have fewer limitations on the business’ management and maintenance in comparison to other business structures.
Registering your LLC is streamlined
An LLC is ideal for startups because it is a fast and simple process. Registration can be done without an attorney, and can be filed with your state. Once you’ve registered, it doesn’t take long to get the necessary documentation from the IRS to start your business.
Nevertheless, setting up an LLC the right way in the beginning is essential to avoid problems down the road. If you would like help with deciding how to structure your new business, as well as the filing process, call Neil Miller Consulting at 917.974.6651 or visit www.neilmillerconsulting.com. Your first hour of consultation with Neil is free!