The Advantages of Forming an LLC
Knowing the benefits that a certain type of business entity offers to you is one of factors that can help you decide to go for it or else reject it. On the part of LLC, it has really pleasant benefits not only to the business but also to the individual members forming it. What makes it this advantageous is that it does not belong to either partnership or corporation. It is an individual type of business entity that possesses the good points of the partnership and the corporation. Its benefits are limited liability, favorable tax treatment, and flexible asset distributions.
Limited Liability
LLC (Limited Liability Company) is not a corporation but deemed as a corporation when it comes to payments of liabilities. Whatever the debts and liabilities incurred by the company, the creditors can only run after what the company owns. The LLC members or owners are hands-free because their personal properties cannot be claimed unless otherwise they are set as collateral properties.
Favorable Tax Treatment
Because an LLC is not categorized as a partnership nor a corporation, it can choose on its own how to be taxed by the government. Remember that the government's tax treatment towards a corporation is much stricter than that of the partnership. So, choosing to be taxed as a partnership is the advantage in here.
Flexible Asset Distributions
When liquidation comes, then also comes the time of sharing or distributing the remaining assets of the company. There is no specific method or formula to be followed as distribution is flexible. The members are free to decide together what is the method of distribution they will adopt.
Basically, an LLC is an advantageous form of business entity. Get the guidelines on how to form an LLC from your State's LLC division offices. Guidelines on how to incorporate a business can be obtained from your State's corporation division offices. You can have an attorney to assist you in handling all the required legal documents.
Limited Liability
LLC (Limited Liability Company) is not a corporation but deemed as a corporation when it comes to payments of liabilities. Whatever the debts and liabilities incurred by the company, the creditors can only run after what the company owns. The LLC members or owners are hands-free because their personal properties cannot be claimed unless otherwise they are set as collateral properties.
Favorable Tax Treatment
Because an LLC is not categorized as a partnership nor a corporation, it can choose on its own how to be taxed by the government. Remember that the government's tax treatment towards a corporation is much stricter than that of the partnership. So, choosing to be taxed as a partnership is the advantage in here.
Flexible Asset Distributions
When liquidation comes, then also comes the time of sharing or distributing the remaining assets of the company. There is no specific method or formula to be followed as distribution is flexible. The members are free to decide together what is the method of distribution they will adopt.
Basically, an LLC is an advantageous form of business entity. Get the guidelines on how to form an LLC from your State's LLC division offices. Guidelines on how to incorporate a business can be obtained from your State's corporation division offices. You can have an attorney to assist you in handling all the required legal documents.
