Starting your own business is a bold decision but it can also be very rewarding. From the outset, you’re going to have to make some important calls, and choosing the appropriate business structure is one of these.
One of your options is to form a Limited Liability Company (LLC). What kind of incentives are there to go down this route?
Many startups choose to operate using their personal bank accounts. The benefit of this is that it is quick and easy to get going with transactions and start making sales. The downside is that you may leave yourself open to legal liability. By using an LLC structure, you can separate your business from your personal accounts and property. This means that if something does go wrong, the company can take the fall rather than your personal assets.
It’s important for small businesses to keep their tax bill to a minimum. With other business structures, you may find yourself susceptible to double taxation. An LLC can help you to avoid this.
Certain business structures require decisions to be authorized by the board. This typically isn’t the case for an LLC. What this means is that you can bring on board new investment partners very easily and make important changes without facing a backlog.
Choosing a structure for your business is just one of many decisions you’re going to have to make. To ensure that you go down the most profitable path, it may benefit you to have some legal guidance behind you.