Why Setup an LLC?
So you are finally ready to take the first steps of opening up your own business. You have prospective clients waiting in the wings, your business ideas are solid, but you aren’t sure how to protect yourself legally. Today we are going to look at what is a LLC (Limited Liability Company) and why you may want to setup a LLC before you open your business.
What is an LLC?
An LLC is a type of business ownership that is similar to a corporation, which allows the owners of the business to have limited personal liability for the debts and actions of the business. The LLC also combines features of a partnership structure to allow management flexibility and pass-through taxation for those looking to have multiple members and/or investors. Pass-through taxation simply means that the company files taxes showing its income and other required information, but does not pay any tax on that income. The members of the LLC pay taxes on the income based on the percent of ownership of the company.
So how does an LLC benefit me?
A) There are flexible ways to be taxed such as a sole proprietor, partnership, S corporation, or C corporation.
B) There is limited liability to the owners, in that the LLC provides basically the same liability shield as a corporation.
C) An LLC typically requires less paperwork than a corporation, and are generally cheaper to setup and maintain.
D) Allows for pass-through taxation (except for those that elect to be a C corporation)
E) The LLC can be owned by one person or multiple
F) There are no shareholders required
G) Operating Agreements can, and should, be setup
If you are considering opening a business or have already opened a business but are not yet taking advantage of the benefits a LLC can provide, call us for a free consultation at 601-336-0305 or email us at songylaw@gmail.com.
PLEASE NOTE: Nothing in this post shall be construed as an offering of legal advise. These posts are meant for informative and educational purposes only. Please call our office to discuss any legal issues you may be facing.
