You probably thought carefully before selecting the current legal structure of your company. Your chosen entity may continue to meet your needs, but that doesn’t mean a change in business structure cannot improve things.
Fortunately, business structures are not etched in stone, and entrepreneurs can change them to meet new needs or obtain certain advantages. Below are three times changing your business structure may benefit you and your company.
Obtaining tax advantages
Of course, the government wants its share of your business profits. As such, excessive tax burdens can make or break a business in the deep south. Changing your structure from a limited liability company (LLC) to an S corporation can reduce your tax hardships, ensuring your money remains working for your business.
Reducing your liability
A sole proprietorship is probably the simplest entity to set up and maintain. Unfortunately, this choice may leave entrepreneurs unprotected against legal liability. That means your creditors can come after your personal assets to obtain full payment. Switching your company to an LLC or corporation protects your savings from the debts your business owes.
There may come a time when you want to attract an investor or obtain a business loan. Maybe you need funds to expand your operations and meet increased consumer demand. Investors and banks prefer companies with formal business structures like corporations that spell out the rights and responsibilities of all.
As you can see, it is possible to gain measurable benefits from making structural changes to your operations. Remember to ensure you will remain compliant with Georgia business laws before making any binding changes to your company.