The truth is that a limited liability company (LLC) is quite popular among USA-based businesses. You may be surprised to learn that thousands of new LLC businesses are registered each day. Thus, if you are an entrepreneur planning to start a new business, then you need to know the benefits of an LLC for business. You can even benefit from online llc formation.
Personal Asset Protection
If you want to protect personal assets from those of the business then you should form either a corporation or an LLC. The LLC protects your personal assets from business creditors. Thus, you can be assured that your house, bank account, or cars are safe. However, if you are running a business as a general partnership or sole proprietorship, then a lawsuit against the business can touch on personal assets.
With an LLC type of business, you decide how it will be taxed. This is the unique benefit it has that cannot be offered by a corporation. You can choose to be taxed like a general partnership or sole proprietorship. The good thing about this type of taxation is that it prevents you from being double-taxed.
Flexible Business Structure
When you compare LLCs to corporations, you will discover that an LLC will offer you a lot of flexibility on how you want the business to be funded and function. If you are running a corporation, you need to adhere to certain formalities. LLC allows you to change the management structure, change ownership roles, and amend certain formation documents.
Easy to Form
You should note that it is easier to form a general partnership or sole proprietorship than it is to form an LLC. However, it is also easier to start an LLC than to form a corporation. Also, LLCs do not require a lot of maintenance requirements than corporations require. You are only required to file your annual reports at the right time. This varies from one state to another.
Legitimacy and Credibility
General partnerships and proprietorships struggle for credibility when it comes to servicing customers. That is because these businesses do not have assumed business names. When you start an LLC, you can select a business name that you have legal rights to. Also, since the name includes the LLC initials, it offers consumers a feeling that your business is credible and legitimate. Moreover, you can expand the ownership of the business to get more funds. Although your business cannot issue stocks, you can get new owners.