A Limited Liability Company (LLC) is a form of business structure that is allowed by state law. An LLC was formed with the intent to limit personal liability of the company owners but also allows the business to be taxed like a partnership structure. Members are those who own the business. The members agree and select on the managers and who will run the day to day operation.
Why Should I get an LLC?It doesn't matter if you're just starting your business or if you've been operating as a sole proprietor it is always good to have an idea of how you want to structure your business. It is important to know when forming your business things that you should take into consideration such as: personal liability, management, taxation, ownership and registering your business.
Reasons that you may want an LLC:
- With an LLC, lawsuits against the company, assets that are in the name of the LLC are content to the claims of the business creditors. Personal assets of LLC members can't be claimed in place of business debts. For most, this is a very important reason why an LLC is necessary.
- Capital is raised from investors when others members provide funds or services for the business.
- Taxes is another advantage of why you should consider an LLC. This just means that profits or losses of the LLC usually are passed on to the LLC members.
It is important to look into your state fee's that are associated with LLCs to ensure that an LLC is right for you. In addition, you should also learn what all your state requires in regards to holding meetings of the members and annual reporting.