A person who wants to start a new business has a lot of things to decide as they work to get it up and running. One thing that has to be decided is what type of business structure to use. Some may choose the sole proprietorship because of the ease, but that doesn’t provide much protection.
The limited liability company, or LLC, is an option that’s appropriate for many small businesses. It comes with specific protections that you may appreciate as a new small business owner.
What are the protections of an LLC?
One of the biggest protections of establishing an LLC is that it draws a dividing line between the business and your personal assets. This is important, particularly for high-risk businesses, because it means that your assets typically won’t be able to be touched if the company is sued.
Another benefit that might be important is the flexible taxation options. Most LLCs use pass-through taxation, which means that the company’s income is filed on your personal income tax return. This prevents double taxation and simplifies what could be a challenging undertaking.
You may also appreciate the benefit of the enhanced professional appearance that comes with an LLC. Some clients, lenders and vendors may take your company more seriously once this is part of your business name.
Entrepreneurs should take the necessary steps to protect their new business. It may be beneficial to discuss the benefits of an LLC and determine if this is the best option for your company. From there, it’s also possible that the individual who assisted you will be able to help you find ways to continue to protect your company.