Choosing a corporate form is one of the first major decisions you’ll make when starting a new business. While limited liability companies, or LLCs, are common because they offer a wide range of benefits, attorneys find that this designation is not suitable for all enterprises. Understanding the benefits and drawbacks of this corporate form will help you make an informed decision about your business.
One of the most important benefits of an LLC is limited liability, which keeps your personal and business assets separate. If the company is sued for any reason, your bank account, home, and savings can’t be seized to repay a claimant.
Attorneys also recommend LLCs to reduce individual tax liability. Revenues generated by this type of company can also be treated as personal income, which could save the business a lot of money every year. Unlike other corporate structures, LLCs are very flexible, with less stringent reporting requirements that make them easier to maintain.
LLCs have some disadvantages that could hold your business back in some situations. For instance, banks, insurance companies, and medical providers are not allowed to operate as LLCs in many states. If your business operates in multiple states, then the corporate form needs to be valid in each location. If you have concerns about opening offices in more than one state, then consult an attorney to determine whether an LLC is right for your business’s needs and locations.
If you’re launching a new business venture this year, then let the experienced attorneys at Penoyar Law Offices in South Bend, WA, help you find the most appropriate corporate designation. With over 100 years of combined experience, they’ve been assisting the local business community for over 40 years, providing in-depth guidance on a wide range of topics. Call (360) 875-5321 to set up a consultation, and visit their website to learn more about their legal services. For more helpful tips, follow the law firm on Facebook.