When you are first getting your business started, you might be more worried about making a profit than how you should set it up. However, the way that you set up your business can make a big difference. While many people choose to set their business up as a sole-proprietor, there are many other options, some of which are better. Here are some reasons why you should set up a limited liability company, otherwise known as an LLC.
When you own a business, you are liable for any problems. This means that, if your business gets sued, you could end up losing your home. If you decide to make your business an LLC, the business is going to be liable, not you.
An LLC is easily started
Forming an LLC is pretty easy and straightforward. In fact, you have to register with your state (for a minimal fee), and you are in business. You will get an Employer ID number, otherwise known as an EIN, and your business is an LLC.
LLCs can be easily changed
Many people hold off on making their business an LLC because they feel like it is going to be hard to make changes. This couldn’t be further from the truth. In fact, the only thing that is hard to change is your business name itself.
You can add partners, sell interests, and make as many changes that you need to, without a lot of trouble.
Avoid extra taxation
Taxes can be the most stressful thing when you start and own a business. The truth is that many business owners get taxed twice. Your business will get taxed and then you will too. If you set up an LLC, your business will be the only one paying taxes.
More and more people are looking to invest in businesses. For those who want to invest in small businesses, they like to choose LLCs because they feel like they are good investments. If you are looking to raise capital, you need to make your business an LLC.
They’re good for your estate
When you are planning your estate, businesses that are already LLCs are protected from creditors, probate lawyers, and court costs. Your business won’t be torn apart when the courts are dividing up your assets.
Making it legal
Setting up your business as an LLC makes it legal. There are going to be certain rules that are going to have to be followed, especially when there are multiple partners in the business. This will go a long way in preventing conflicts between the owners and partners.
While you may not want to consider setting your business up as an LLC, you really should think about it. You don’t want to be held liable if your business gets sued. Many business owners lose everything because they end up being liable if something happens. You also should set it up as an LLC to avoid the extra taxation. You deserve to keep as much of your profits as you can!
One reason that stops someone from setting up an LLC is because they are worried that it is too hard. However, it really isn’t. You will have to register with your state, pay a small fee, and your business is all set up. It really is that simple. Many also worry about making changes. It is just as simple to make changes as it is to set up. You won’t get stuck with a business that you don’t like, just because you set it up as an LLC.
Contact us for all of your legal needs. We will help you set up your business right so that you are protected.