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Published On: Sat, Jan 13th, 2018

Why an LLC seems to be the perfect legal entity for your business?

In spite of the deep-rooted impacts of the Great Recession, people are now increasingly optimistic about the usually climate of businesses in the nation, though majority of the wealth that has been generated has not been spread to the poor and middle class of the nation. Despite that, more than 28% of those who were in the survey thought that the monetary conditions are good or excellent.

There are many who are utilizing this enhancing financial market as the greatest opportunity to begin a new business. Regardless of the industry in which your intended business is in, you should carefully consider the kind of legal business entity that you want to set up. If you have always been eager to form an LLC, here are few reasons to go about the process.

Reason #1: You can avert the instance of double taxation

Depending on the way in which the company has been set up and the number of investors and employees you will employ, the business startup creates an LLC as this helps you avert double taxation and can support different types of stock if needed. When does double taxation occur? Well, this starts when an entrepreneur selects a C-Corp as a business entity and hence this is when both the owner and company are taxed in a separate manner. Forming an LLC will prevent this from occuring.

Reason #2: You will be allowed to choose your LLC location

One more main question is the state where you would like to set up your entity. If you consider the state Delaware, they have always been in the limelight due to their low costs. Even the Delaware Court of Chancery judges are extremely pro-active about business. There are an increasingly large numbers of states that are now following Delaware. Hence, if you’re someone who is all set to incorporate in the form of an LLC, make sure it’s closer to your home.

Reason #3: Changes can be made pretty easily

One more benefit of the LLC structure is that once it is set up, you won’t require making any kind of continuous maintenance and adding on new partners or selling interest in the entity to a new party will all become easier. If you compare the LLC structure with that of a C-Corp, the former is more relaxed and less stringent.

Reason #4: Your personal assets can be protected

There are many startups which opt for the LLC structure just because they wish to protect and safeguard their personal assets against any lawsuits which are directed towards the company. For the novices, a sole proprietorship will definitely be riskier to start with. So, an LLC can be limited and controlled in whatever it can do as long as mergers and acquisitions are concerned.

If you want to build a strong foundation for your business, don’t forget to hire professional registered agents who can handle things on your behalf when you’re not available. This way you will be saved off the harassment of not receiving notices on time.

Author: Pankaj Deb

photo/ Gerd Altmann

About the Author

- Outside contributors to the Dispatch are always welcome to offer their unique voices, contradictory opinions or presentation of information not included on the site.

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