How to Form an LLC in an Unstable Global Economy
The global economy is unstable right now. Former rock solid companies are being shaken. Some have closed up completely. If you are planning to create your own company, the present climate might be a deterrent. Yet as the saying goes, “Time is Gold”. If you have a business that needs to be launched as soon as possible you need to create that company now. Consider learning how to form an LLC. An LLC or a Limited Liabilities company is actually the best form of organization that can weather an unstable global economy.
First, an LLC is as strong as a traditional corporation. Members can go from 3 to a dozen or more. With these members, finances will be robust. Yet an LLC is free from the complicated organizational structure a traditional company has.
Next, the profit is better kept in an LLC because it is a pass through entity. Unlike a traditional company, the profit is subject to double taxation. That is, when the company has a profit, it is taxed first. The remaining profit is then distributed to members and taxed again as members pay individual income taxes. You might need the proper legal documents to declare the LLC to have tax benefits similar to sole proprietorship. However, you could also be taxed the same as traditional companies. The choice is up to you, pass through entity and double taxation has its pros and cons.
Finally, members are better protected in an LLC. The LLC is considered as a separate entity because of the Limited Liabilities. When a lawsuit is slapped at the company, only the company is affected. The members are free from the lawsuit unless specified by State laws. Members are also safe from bankruptcy backlash. Members won’t have to fork their earnings to cover the losses of the company.
Once the company grows, you can then learn how to incorporate your LLC. By this time, even an unstable global economy will not be able to affect your new found company.
First, an LLC is as strong as a traditional corporation. Members can go from 3 to a dozen or more. With these members, finances will be robust. Yet an LLC is free from the complicated organizational structure a traditional company has.
Next, the profit is better kept in an LLC because it is a pass through entity. Unlike a traditional company, the profit is subject to double taxation. That is, when the company has a profit, it is taxed first. The remaining profit is then distributed to members and taxed again as members pay individual income taxes. You might need the proper legal documents to declare the LLC to have tax benefits similar to sole proprietorship. However, you could also be taxed the same as traditional companies. The choice is up to you, pass through entity and double taxation has its pros and cons.
Finally, members are better protected in an LLC. The LLC is considered as a separate entity because of the Limited Liabilities. When a lawsuit is slapped at the company, only the company is affected. The members are free from the lawsuit unless specified by State laws. Members are also safe from bankruptcy backlash. Members won’t have to fork their earnings to cover the losses of the company.
Once the company grows, you can then learn how to incorporate your LLC. By this time, even an unstable global economy will not be able to affect your new found company.
