One of the first and most important decisions an entrepreneur will make is selecting the corporate form for their business entity. One very popular option is a Limited Liability Company, or LLC, which combines some features of a sole proprietorship with the protections of a corporation.
According to The Law Offices of Bromm. Lindahl. Freeman-Caddy & Lausterer, a business law firm based in Wahoo, NE, creating an LLC offers considerable advantages, including:
- Limited Personal Liability: Because an LLC is a legally distinct entity, the owners and managers are not personally responsible for its debts and financial obligations. Many business owners decide to form an LLC to protect their personal assets from the consequences of an unforeseen financial failure or liability lawsuit.
- Beneficial Tax Rates: In many situations, income generated by an LLC can be claimed on the owner's individual tax return, avoiding higher corporate income tax rates. These tax advantages can potentially save business owners thousands of dollars per year.
- Lower Compliance Requirements: State business laws require corporations and other entities to conduct board meetings, file minutes with the appropriate agency, and fulfill a variety of other requirements. LLCs, on the other hand, usually require only an annual renewal filing and allow business owners to adopt any management structure that meets their needs.
The benefits of forming an LLC make it a compelling choice for many new business enterprises, but the best structure for any company will depend on a variety of factors. In some instances, the drawbacks of an LLC may outweigh the advantages, or another corporate form may be better suited for fledgling businesses.
Before creating a new company, consult with the business law attorneys at The Law Offices of Bromm, Lindahl, Freeman-Caddy & Lausterer. For over a century, this firm has been guiding entrepreneurs and established businesses alike through the complexities of the legal system. Visit their website to learn more about their long-standing tradition of excellent service, or call (402) 443-3225 to arrange a consultation with a member of their team today.