Starting a new business is potentially a great way for you to increase your income and take an idea you have and turn it into something profitable. Unfortunately, new businesses come with a lot of risk as well as the potential for profit.
You and the people who depend on you financially could wind up in a vulnerable position if you don't take the right steps when planning your business initially. The right form for your company is an important step that far too many people overlook. Many people go with the simplest option, which isn't always the best one.
Even if you intend to own the company without a partner, creating an LLC could be in your best interest. An LLC is a limited liability corporation, which is a legal structure that extends certain protections to you as the owner of the company.
An LLC protects your personal assets
One of the biggest risks you face as a business owner is the potential loss of your own assets if something goes wrong with the company. Individuals who get hurt because of a defective product, or even staff that you are not able to pay because the company failed, could take legal action against you as the business owner. Those actions could include seeking financial damages from you as an individual.
Obviously, you don't want to have to worry about losing your house if your company fails. An LLC creates an extra layer of protection for your assets that can help you avoid potentially losing your individual financial asset as a result of a business problem.
An LLC can ensure an easier transition in the future
If you want to start a business with the hope of eventually selling it for profit to a larger company or an investor, being the sole proprietor could cause complications in certain circumstances. An LLC can make certain transfers easier.
It could also be possible for you to plan for the future, including a time when you will no longer want to be involved with the company, through creating an LLC. By naming other people to your board of directors, you can give them authority in the company which will keep it stable in the event that anything happens to you.
Different businesses require different strategies
Depending on your personal situation, your professional experience and the goods or services you intend to provide through your company, there are countless potential options for how you structure, manage and maintain your business.
An LLC can be a great solution for some, but it can be more of a hindrance than a help for others. The best way to determine what structure you should use for your business may well involve speaking with an attorney who is familiar with business formations in Georgia.