When you set off on your new business venture, the first thing you must do is decide what sort of business structure suits your needs best. Each structure will benefit different goals, internal company structures, and how you personally want to see your business run and managed.
An LLC, or a limited liability company, is one of many structures available for your perusal. Its popularity shows that many business owners like yourself find plenty of benefits with it.
Benefits of an LLC
Fit Small Business examines the benefits and downsides of an LLC. On the benefits side, registering as an LLC immediately gives you more credibility as a business entity. People see that you have a formal business structure and will often feel more likely to trust you accordingly. You have simplified tax options that also potentially lower your taxes, along with straightforward paperwork and related paperwork filing. You also have great flexibility with management and ownership options.
Of course, one of the biggest draws is the limited personal liability aspect. In short, if your business suffers financially and you end up having to file for bankruptcy, you do not have to worry about this involving your personal assets.
Potential flaws and downsides
On the other hand, LLCs also have some potential flaws. First, the annual and maintenance fees for LLCs can actually reach hundreds of dollars a year in some places and differ greatly from state to state. You will likely not gain the attention of investors either, so if that is something you wish to do, an LLC may not suit you. Finally, member turnover is somewhat inflexible, with rigid requirements and paperwork needed for any member change.
You can speak with legal help if you need additional guidance in deciding what option may suit your needs best.