Can an LLC Help Your Business?

Setting up a limited liability company, or LLC, can be the right decision for you and your business. An LLC is a popular and flexible business structure that is a hybrid of partnership and corporate structures. The LLC developed because business owners wanted their businesses to function more like traditional partnerships, in which income is distributed among the partners, but also wanted to include aspects of a corporation, such as protecting partners from personal liability for the business's debts.

Why Do I Need An LLC?

Depending on a business owner's circumstances, creating an LLC can be a beneficial decision. There are numerous advantages to forming an LLC, which can add to the value and sustainability of a business model.

Some of the more significant benefits of creating an LLC include:

  • Tax benefits - In the typical corporate structure, the entity and dividends of shareholders can be taxed. The LLC avoids double taxation by having profits pass through to the owners as personal income.
  • Limited liability - The members of an LLC are protected from debt and any egregious actions of the business.
  • Enduring legacy - An LLC will continue to exist beyond the illness or death of its owner, meaning the business will not die with its owner.
  • Economic distribution - Interests in the LLC can be assigned and economic benefits may be distributed at a predetermined ratio without transferring title or control to the membership interest.

How Do I Set Up An LLC?

To set up an LLC for your business, you should work with an experienced attorney who is familiar with all of the regulations and requirements of business operation. Owning and operating a business is a challenging enterprise and navigating through the complex requirements is something that no business owner should take lightly. Working with the right attorney to set up an LLC will help you avoid pitfalls and set you and your business on the path to maximize its profitability.