LLCs are a type of legal entity that has characteristics of a corporation, partnership or sole proprietorship. Under most circumstances there are many advantages for business owners to setup an LLC. LLCs aren’t bound by the same rigid rules of corporations. If you are a “one-man” operation or have hundreds of employees, an LLC can keep you protected while still allowing for expansion and growth. With an LLC, there’s no requirement for special meetings, extensive corporate records, or many other formalities.
It’s for these reasons that LLCs are one of the more popular and flexible types of business legal structures, especially for small companies and startups.
The biggest benefit of an LLC is that it can protect its owners’ personal assets should the business face any legal issues. Suppose your business is hit with a lawsuit. If your business is structured as an LLC, your assets can be protected from any judgments that are imposed on the business. If your business can’t afford to pay the judgment, you, as a business owner, may not be forced to pay the money from your personal finances.
Flexibility in how the business’s management team is structured is another key benefit. LLCs can either be member-managed, which means the day-to-day responsibilities are handled by the owners themselves, or manager-managed, meaning the owners bring in someone from the outside to handle the daily running of the business. LLCs don’t limit how many owners a business can have, and they allow you to see how profits are divided among the owners, based on the operating agreement.
If you are interested in starting an LLC, please give us a call. We’re here to help you through the process and start you on your path to success.
Thomason, Swanson & Zahn
218-303-9549