There are a lot of attractive benefits to starting a Limited Liability Corporation for your business in the early stages. They are very simple to start and you won’t need much in the way of money to pay for it. They can prevent double taxation and are easy to start. If you need little funds for your startup business, you can easily apply for a title loan with Owens & Clark Financial to get the money you need. Applying for a title loan with them is quick and easy. Below are some of the top benefits of an LLC for your startup business.
What are the Benefits of An LLC for your Business
Avoid Double Taxation
While it depends on the number of investors or employees a startup has, forming an LLC is a great choice because it will help to avoid the possibility of double taxation.
This typically occurs if an entrepreneur decides to choose a C-Corp structure for their business. In this case, both the company and the owner could be taxed separately in April. Forming an LLC will prevent this because the business will be taxed as a sole proprietorship. If you are wanting to have your business be a corporation, this can be easily done at a later time if you choose to start as an LLC.
Ability To Choose LLC Location
Another benefit of forming an LLC for your startup business is that you will be able to choose your LLC location. The cost to set up your LLC will greatly depend on where you form it. Different states will require different costs for setting it up. While you may be tempted to start an LLC in another state to save on startup costs, it makes more sense, in the long run, to start your LLC in the state in which you reside.
Changes Are Easy To Make
Running an LLC is not too difficult. Once you have it set up, there is not a lot of need for continual maintenance of the structure. More importantly, it can be simple to be able to sell interest or add new partners to the entity. The complete structure of this type of business is more relaxed than a C-Corp business structure. There are less restrictions set in place for Limited Liability Corporations on most of the administrative items when compared to other business structures.
Assets Are Protected
With the formation of an LLC, your personal assets will be protected against any lawsuits which may get directed at the business. A sole proprietorship is typically a more risky type of entity to start up.
Even more risky is a general partnership. There are many limitations for businesses with LLC structures. However, it is best for businesses that are just getting started. The ability to convert your business to an S-Corp or a C-Corp, later on, is possible and easy to do when appropriate for your business.
Easy To Register
Forming an LLC could not be more simple. It is fast and easy to get started. You are able to form the entity without the need for hiring an attorney. In some states, the cost for starting an LLC can be as low as $100 to get started. Once you have registered your startup, you will be able to get business bank accounts and an Employer ID Number from the IRS. It just takes a few simple steps and you have yourself a business.