The Advantages of Forming a Limited Liability Company
When one has a personal business -- whether as the sole proprietor or with a partner -- you can expect two problems: first, you are accountable to any losses and any debts that your business suffers. It really doesn’t matter who is at fault. But the legal documents of your application show that you are the owner – or a partner – you are obligated by law to pay them. Your second problem involves the taxes. As a single businessman, you will pay a lot of taxes. One, you need to pay the tax for your business which is relative to your business’ income. The other is the self-employment tax. Since, according to the law, you are self-employed, you will pay more taxes. There are times, in fact, when that businessman will have to pay a larger self-employment tax than the income tax.
In other words, this is very risky. You can, as a matter of fact, lose everything with this type of business.
Fortunately for you, there is a much better alternative. If you were to start a business, then you’d better learn how to form an LLC. But what is an LLC? A Limited Liability Company, also known as LLC, is a business type where you literally have limited liability on the company’s debts, loses, and taxes.
When you are on an LLC, it basically means that you are a partner on all the business in that company. Therefore, you are granted by the law to choose which tax to pay which makes it more convenient for you. Also, as mentioned already, the members of the LLC cannot be held liable for any losses or debts that might someday befall the company.
For more information about LLCs, do check the internet. There are numerous sites which offer assistance on how to incorporate different businesses and form an LLC.
In other words, this is very risky. You can, as a matter of fact, lose everything with this type of business.
Fortunately for you, there is a much better alternative. If you were to start a business, then you’d better learn how to form an LLC. But what is an LLC? A Limited Liability Company, also known as LLC, is a business type where you literally have limited liability on the company’s debts, loses, and taxes.
When you are on an LLC, it basically means that you are a partner on all the business in that company. Therefore, you are granted by the law to choose which tax to pay which makes it more convenient for you. Also, as mentioned already, the members of the LLC cannot be held liable for any losses or debts that might someday befall the company.
For more information about LLCs, do check the internet. There are numerous sites which offer assistance on how to incorporate different businesses and form an LLC.
