Do you want to launch a new business but are uncertain about what type of legal company should be established? Probably one of the best options if that sounds like you might be forming an LLC. Yes, there are many other types of business forms available. The Limited Liability Company, however, is usually considered the wisest choice for those entrepreneurs who decide to start a small company. In this article, we will tell you why this is often the main pick and some of the advantages of operating this type of business.
LLC VS Corporations
Many positive aspects are associated with operating this kind of business, given that its prevalence in the market has been increasing in the last few years. As such, if you are thinking about launching your company, investigating the steps to be taken when forming an LLC is definitely worth a look. With that being said, let’s have a look at how starting this type of business will benefit you.
In a few words, a Limited Liability Company is the same thing as a corporation, with the difference that it doesn’t need the owners of the company to go through the process of incorporating the business. An LLC, on the other hand, has the same favorable tax treatment that a partnership has, but not the administrative burdens that a corporation has to maintain. To put it even simpler, a Limited Liability Company has more freedom and capacity to adapt than the traditional business forms, while still maintaining their beneficial characteristics.
Apart from that, the process is pretty straightforward. Generally, complying with the tax obligations to the Internal Revenue Service only involves filling out a form annually and sending it in. There is no need to deal with documents and files like in a partnership or to have board votes or regular meetings like in a corporation.
When forming an LLC you are able to organize the firm as conveniently as possible. Most of the people that decide to launch a Limited Liability Company are just giving their first steps in the business world, so having the chance to experiment with several organizational structures is a bonus for them, until they are able to discover what business model better suits their needs. In fact, you can even start your company as a single proprietor and transition into a corporation once your firm has grown.
In addition to that, this type of organization can protect you more than a sole proprietorship, where there is a personal responsibility. Furthermore, you can put a portion of the income in a retirement plan, a tax-free method of retirement that safeguards your financial resources even in the case of being sued or when unanticipated costs arise.
Helping Businesses With Their First Steps
As a new company owner, you are probably unsure if forming an LLC is the way to go. Apart from the advantages we have already mentioned, this kind of business will give your assets increased protection. If you want to know more about how this works, you can call us at (800) 580-4870 to speak with one of the Corporation Center representatives. We have got your back!