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Why incorporate your small business as an LLC
Why incorporate your small business as an LLC? To safeguard personal assets!
A partnership is easy to set up and require a minimal amount of administration, but are you really willing to loose your house, your car and your savings account if things take a turn for the worst? Even sound and upright enterprises get sued, and there is of course always the risk of shifting market trends that render you without business. Why incorporate your small business as an LLC? Because by setting up an LLC, you make sure that you only have limited liability for acts carried out by the LLC, as well as debts acquired by the LLC. This is one of the most important differences between a simple partnership and an LLC.
Why incorporate your small business as an LLC? To save on taxes!
Since all forms of enterprises creates expenses, you should take advantage of the U.S. tax legislation and make sure that these expenses are turned into tax deductibles. By forming a corporation or an LLC, you make it much easier to deduct business expenses since you and your business will be two separate entities.
Why incorporate your small business as an LLC? To gain more credibility!
Going through the trouble of setting up a corporation or an LLC can make your company look more reliable and trustworthy – a real company. Incorporating a small business sends out a clear message of dedication and long time commitment. This will often make contacts with vendors, creditors, business associates, clients and the state much easier. Why incorporate your small business as an LLC and not as a Corporation?
There are several major differences between an LLC and corporations, e.g. the C Corporation and the S Corporation. Which alternative that is best for you is impossible to tell without taking a wide range of factors into account.
- Why incorporate your small business as an LLC and not as a corporation? Because generally speaking, an LLC is easier to form and requires less paperwork, both during the formation process and during the years to follow.
- Why incorporate your small business as an LLC and not as a corporation? Because with an LLC, there are no mandatory annual general meetings for shareholders and you never have to relinquish power to a board of directors.
- Why incorporate your small business as an LLC and not as a corporation? Because in an LLC, the allocation of profits and losses can be disproportional without bringing on severe tax ramifications.
- Why incorporate your small business as an LLC and not as a corporation? Because in the United States, business entities can usually only be formed and maintained by U.S. citizens. The LLC is an important exception to this rule and can be set up and maintained regardless of citizenship.
- Why incorporate your small business as an LLC and not as a corporation? Because in most states, setting up a corporation on your own is not allowed, you have to involve other people. An LLC can on the other hand be formed by a single natural person in almost all the states.
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