Reasons Why LLC is The Best Option For Your New Business Venture

Starting a business means making tough decisions. This is why you need to carefully think every detail through. Without considering and understanding the essentials of starting and managing a business, your business is at risk of ending up as a failure.

You might be wondering which of the business structures will work best for you. This article will answer why LLC is the best option for your new business venture.

Why Opt for an LLC?

Over the years, LLC has garnered attention as one of the best options for startups and new business ventures. Here are a number of benefits for choosing an LLC for your new business venture.

1. It provides personal asset protection.

One of the first and foremost reasons why many opt for an LLC when starting a new business is its ability to provide personal asset protection. LLC is a type of business structure that also serves as a layer of protection that prevents your business creditors from pursuing your assets.

It is often considered a corporate veil that protects your assets including your house, car, personal bank accounts, and more. In a sole proprietorship or general partnership, a corporate lawsuit is also considered a lawsuit against you as a person which puts your assets at risk.

2. Offers taxation options.

Another benefit of an LLC is the privilege of having flexibility regarding how they’re taxed. For instance, a single-member LLC is usually treated as a disregarded entity. This means that the business activities will not be reflected on the business owner’s federal tax return.

Moreover, LLCs also pay taxes at a lower rate compared to corporations since they are dependent on the total income of the business owner rather than the business.

3. Provides flexibility.

In comparison with other business structures, LLCs allow business owners flexibility over how the business should function and how it should be funded. Other business structures like corporations require adherence to formalities such as having a board of directors, appointed officers, and conducting meetings with shareholders.

In LLCs, business owners can change the managerial structure, ownership roles, and formation documents. These changes can be made anytime with the assurance that the state is notified of the new business structure.

4. Simple and easy setup and requirements.

The initial process of starting a business is unfamiliar and seems to be an overwhelming task for anyone. However, when it comes to forming an LLC, the process is simple and easy. In addition, all the information you need is available on the government website.

Submission of applications can also be done online or via postal mail. In addition, the fees you need to pay for the application are reasonable and affordable. If you’re residing in Louisiana, the Louisiana LLC cost is $100 in filing the Articles of Organization, this is much cheaper compared to the $300 fee in Texas.

5. Credible and legitimate.

A business needs to be credible and legitimate, especially in the eyes of potential customers. Other business structures like sole proprietorships and general partnerships may give off a sense of lack of credibility since they typically operate under their owners’ personal names.

Meanwhile, LLCs will allow you to pick a business name that you will be granted exclusive rights to.

Considering which business structure is important in starting a business. You must choose the business structure that best fits you. If you prefer to separate your personal assets from your business and enjoy tax flexibility, then, LLC is the best choice for you.