Is an LLC the Right Choice for Your Business?
Deciding how to best organize and structure your new company is an important decision all new business owners face. Because of the benefits to both small and large companies, an increasingly popular option for new business owners is to set up their business as a Limited Liability Company (“LLC”).
In order to help you make the right decision for your business, we have listed several of the benefits that come along with structuring your business as an LLC.
“Members” (i.e., owners) of an LLC have limited liability for the business’s debts. Consequently, an LLC extends additional protections over the personal assets of its members that may not be offered through a sole proprietorship or traditional partnership.
The IRS does not tax an LLC directly. This provides several options for members of the LLC to choose how they want to be taxed.
Many states allow LLC businesses to protect their trade names by registering the name of their company with the state. Registering your trade name prevents other individuals or companies from using your trade name without your permission.
Unlike a sole proprietorship, structuring your business as an LLC allows for your company to include multiple owners or members.
An LLC helps your business avoid “double taxing.’ Rather than passing through the LLC itself, an LLC’s income passes through its members’ personal income tax returns. As a result, the income is only taxed once.
Although there are numerous benefits to structuring your new business as an LLC, it is important to remember that depending on your particular situation, an LLC may present a few downsides as well. As a result, it is a good idea to conduct your own research and consult with an attorney to weigh the pros and cons of each option available to you and your business.
If you are ready to start your business today or have more questions, give us a call at The Fleming Law Firm and receive a free thirty-minute consultation!