Are you planning to start your online business venture soon? That’s great news! But have you already decided what business structure you’re going to have?
One of the legal structures you probably have encountered is an LLC or Limited Liability Company. If you’re still in the process of digesting whether an LLC is suitable for you, this article will list down all the reasons why it could fit new entrepreneurs like you.
The Fundamentals of LLC
Many entrepreneurs opt for an LLC because it has liability protection for legal matters. But you still have to ask if it is enough for your online business?
Yes, because it separates your individual assets from your business finances.
If your business runs out of finances or gets sued, there is an assurance that your personal assets such as money, properties, and investments would not be at risk. If ever you have members, the same thing goes. Their individual assets are separated from the business. This is the safest system for startups who are still learning to grow a business. Your customers and other businesses associated with your LLC do not have the right to chase and follow you if you owe money or property to them.
Yes, because you choose how you want to be taxed.
This is also one of the reasons why entrepreneurs keep on choosing an LLC. They are free to choose the type of taxation they want. You can decide it to be like a sole proprietorship, partnership, or S, C-corporation. If you are worried about taxes, try LLC’s system. You only need to declare how you want to be taxed on filing your papers. Likewise, an LLC is only taxed once, unlike a corporation that goes through two taxation processes. As a result, you can save a favorable amount of money.
Yes, because forming an LLC is affordable.
Most startups choose LLC as their business structure. The primary reason is its affordability. You can file and form an LLC at a low cost, ideal for any business owner. However, if you want to save more time and form an LLC for a low cost, we recommend using LegalZoom (see its review here).
However, keep in mind that filing the Articles of Organization differs in every state. There is also a filing fee, and it depends on your state’s guidelines. For example, the Delaware series LLC cost is $90 when filing for a Certificate of Formation also known as the Articles of Organization in other states.
Yes, because you can either go solo or with members.
LLC is a flexible type of business structure. You can either build a business on your own or have partners or members. Regardless of the two, you still need to comply and get your unique number or EIN at the IRS. This will be helpful if you’ll have employees in the future.
If you’re still hesitant and in doubt to take and file an LLC, it’s ok not to rush things. While most aspiring businessmen are eager to invest in many things for their business, it is a must to take some time to consider and understand the pros and cons. Every effective and successful entrepreneur knows that business finances should be handled well and planned accordingly. However, if you think you’re ready enough, take that road and be one of the online startups to take advantage of the benefits of forming an LLC.