Benefits of an LLC
Workers Comp Attorney
When you start a business, choosing the right business structure is one of the most important decisions you can make. If your business is small, it may be in your best interests to form a limited liability company (LLC). Here are some of the main benefits you will receive from having an LLC.
Limited Personal Liability
When you form an LLC, you have the advantage of limited personal liability. Unlike with a sole proprietorship or a partnership, an LLC protects your personal assets from liability. This is because an LLC is legally separate from its owner. If your business experiences financial troubles, you may lose money you invested in the company, but your personal assets will be safe.
More Flexibility With Running Business
Corporations require a management structure that consists of a board of directors that supervise company policies. The owners must meet once a year to elect directors and conduct other business. When you have an LLC, you have much more flexibility in how you run your business.
More Tax Advantages
The more tax advantages a company has, the better. LLCs are automatically classified as partnerships or sole proprietorships. They are allowed to use pass through taxation, letting them avoid paying LLC taxes and corporate taxes. The LLC’s income and expenses go through the owner’s personal tax returns.
Nobody likes dealing with piles and piles of paperwork. It is time-consuming and tedious. When you have an LLC, you will not have to worry about extensive paperwork. This is because LLCS are not required to keep extensive records or file annual reports. Corporations, on the other hand, are required to hold yearly shareholder meetings, make annual reports and have strict record keeping requirements.
Flexible Profit Distributions
LLCs don’t have to distribute profits equally to owners every year. They can distribute them in any way they please. For instance, an LLC may have two owners but one of the owners put more money into the company during the startup phase. That person may receive a greater profit share.
Consulting With a Business Lawyer
If you’re considering forming an LLC, you should speak to a reputable business lawyer in Bethesda, MD. Choosing a business structure is a serious matter and you want someone with knowledge and experience on your side. A business lawyer will evaluate your business and help you form an LLC in a timely and efficient manner.
Thanks to Brown Kiely, LLP for their insight into business law and benefits of an LLC.