LLC stands for Limited Liability Company, and it is used as a legal structure to protect business owners from debt or liabilities that arise from the company. An LLC is ideal as they prevent you from paying extra taxes and enduring hefty paperwork that a corporation route would entail. Once a company has created an LLC, any legal implications will not fall at the feet of the owner. The business will have become its own separate entity.
Who should have an LLC?
If you are just starting out on your own business adventure, then you should absolutely think about forming an LLC. If you are going into business with a partner, then this is especially true as it prevents any clarity issues further down the line. An LLC is there to protect you and limit your legal liability and involvement, and so it really pays off to have one, should there be any liability or debt issues in the future.
An LLC can be used for a wide range of businesses, regardless of whether they are big or small! Whether there is just one owner or multiple stakeholders, you can form an LLC that is tailored to the business.
The Pros of an LLC
If you’re looking for an easy start, experts for ZenBusiness describe an LLC as an option for a more flexible management style business. There are several advantages to using an LLC, these include credibility, flexibility, personal asset protection and simplicity. The credibility of an LLC is not to be underestimated as it will help create an air of legitimacy around your business. Trust in a business is crucial, making this one of the bigger pros of an LLC.
Additionally, LLC users can choose how they want to be taxed, which is another great example of the flexibility and control that an LLC can offer you and your business.
The Cons of an LLC
As with anything, there are some disadvantages to forming an LLC, namely, it tends to be more expensive to form an LLC than just a single ownership or joint partnership. Another con of an LLC is that it can lead to investment disadvantages, what this essentially means is that the LLC is not a good option for companies who are intending to get outside investments.
How to Form an LLC
It may seem like a daunting idea to form an LLC but it can be a straightforward process once it gets going. The requirements will depend on the state you are in, and there are five basic steps you need to form your own business:
1.Name Your LLC
2.Choose a Registered Agent
3.File the Certificate of Formation/Articles of Organization
4.Get an Operating Agreement
5.Apply for an EIN and Review Tax Requirements
If you are a new business owner forming an LLC should be a top priority! Liability protection and personal asset protection will put you in a secure position in moving forward with your business. Once you get going, you ought to consider learning how to boost your online presence, using websites and apps to help with your SEO.