So you’ve finally decided to bite the bullet and make it on your own as an entrepreneur?
Well, your first step is to register your company. One of the best business structures for upcoming entrepreneurs is a Limited Liability Company (LLC). Forming an LLC isn’t a strenuous process and offers great protection for your business assets.
So what are all the benefits of an LLC compared to other business structures?
Here’s what you need to know about having an LLC:
Many entrepreneurs start as sole proprietors. This means that they operate the business under their name without worrying about registering a company.
While this is convenient, it leaves you in danger of losing your personal assets in the case of a lawsuit. One of the main LLC benefits is that your personal assets aren’t tied to your company assets.
You’ll have the peace of mind that you can operate your business without worrying about a lawsuit that could wipe out your assets!
Forming an LLC Is Easy
The paperwork and bureaucracy associated with registering a business put many entrepreneurs off. But forming an LLC, as we mentioned in our introduction, is one of the easiest processes.
The paperwork is minimal and in most cases, the bureaucracy isn’t as overwhelming compared to other business structures. You can run an LLC by yourself or also have partners to work with.
You’ll need a registered agent to handle your legal services but this is a simple procedure. Once you’ve formed your LLC, there’s minimal paperwork to continue operating your business.
No one goes into business to pay taxes but this is an inevitable hurdle that many entrepreneurs have to face.
If you get to minimize your taxes you’ll get to re-invest more money to grow your business. One of the best benefits of an LLC is that you have more opportunities to reduce your taxes.
You can set up your LLC in tax-favorable jurisdictions such as Wyoming, even if you don’t live there. For federal tax purposes, an LLC can get taxed as a sole proprietorship or partnership.
This gives you more flexibility to decide which form of taxation works best for your needs.
You might need to hire an accountant or tax preparer to help you file your LLC tax returns. While this is an extra investment, you’ll find that you can still reduce your tax burden when compared to working under your name!
Those Are the Benefits of an LLC
Now that you know the main benefits of an LLC you can decide whether this is the ideal business structure for you.
If you’re a budding entrepreneur, you’ll find that this is one of the easiest business structures to form. The obligations after forming an LLC are minimal and not intrusive.
You can also protect your assets through an LLC so you don’t have to worry about losing your personal assets. There are also many great tax advantages to running an LLC.
You can find more tips on forming an LLC on our blog!