People who are staring a new business need to decide what structure they’re going to use. While some small businesses default to a sole proprietorship, this might not be their best option. Many businesses are better suited for the limited liability company (LLC) structure.
Establishing your business as an LLC has many benefits. There are three in particular that appeal to most business owners. Understanding these may help you to decide if this is the best option for your company.
Division of assets
One of the most important benefits for most small business owners is that the LLC provides a division between the business’ assets and their personal assets. If the business is sued, the business owner’s personal assets can’t be touched. This protection alone is enough to convince some people to use the LLC.
Some people view LLCs as more reputable businesses than sole proprietorships. This can mean that people are more likely to choose your company over another one that’s not an LLC. Once you register the business as an LLC, no other company can choose the same name as you in your state.
The tax benefits that come with an LLC help some business owners. There’s a bit of flexibility involved depending on how many owners are in the LLC.
Anyone who’s starting a business should ensure they’re taking the appropriate steps to protect themselves and the business. Working with someone familiar with small businesses may provide insight into how you can do this better. This is also someone you can turn to if there’s ever a claim against your company or you need to finetune legal aspects of your company.