An LLC – the common moniker for a Limited Liability Company – is a very popular business structure, especially for newly formed startups. LLCs are companies that have the characteristics and benefits of corporations, partnerships, and sole proprietorships.
As its name implies, LLC’s are great at protecting the owner from liability. LLCs offer several other benefits as well that a new business owner should consider.
Some benefits explained
There are a number of significant benefits to forming a company as an LLC. These include:
- avoiding double taxation, so owner and the company do not get taxed separately
- Can be formed in any state
- Ease of changes
- Asset protection
- Ease of registration
Generally, the filing and maintenance requirements for LLCs are less than other forms of a business, such as a corporation.
Who is an LLC ideal for?
For many, an LLC may be the best fit, including:
- Medium and high risk businesses
- Wary owners with a considerable number of personal assets
- Owners looking for a business structure with a lower tax rate
- New business owners looking for an easy and safe business structure
Despite the advantages, there are some other considerations. While owners are not personally liable under an LLC, they are still considered self-employed and must pay self-employment taxes towards Medicare and Social Security. In addition, some states may require the dissolution and reformation of an LLC when a member leaves or joins the LLC.
Attorneys with experience in business law will have ways to approach the trickier aspects of Georgia LLC entrepreneurship. For example, one may suggest proactively putting an agreement in place – before ownership in the LLC is ever traded or sold.