If you’re thinking of starting a business, one of the most common business structures is a limited liability company (LLC). You may also have started running your business on the side, under your own name, and now that it has grown, you want to turn it into an official LLC.
What are the advantages of having an LLC? What is this going to give you that other types of corporations will not?
A few advantages you may want to consider
The type of business you start will have a major impact on how it runs moving forward. As such, keep these potential advantages in mind:
- You may get tax breaks or have to pay less in taxes. For instance, if you’re just doing business as yourself, you report all taxes personally. If you run an LLC, you can leave some of the earnings in the company to help it grow.
- You can ensure that your intellectual property (IP) is protected. For instance, your company can protect the name and logo so that others can’t pretend to be you and infringe on your business.
- You are personally protected if your company gets sued. If you just run the business under your name, someone may be able to sue you and take personal assets. An LLC can still be sued, but that obligation does not pass down to you directly.
The type of business that is right for you depends on many factors, from your future goals to the size of the company. Just make sure that you understand all the options you have and the steps you’ll need to take when setting everything up.