The Beneftis of Creating a Limited Liability Company
There are several reasons to form a Limited Liability Company (LLC) for your business. The main benefits include protection from lawsuits, asset protection, anonymity, tax savings, deductible employee benefits, and credibility in your community.
When you create a Limited Liability Company (LLC), you create an entity separate from your own personal being. This is beneficial for numerous reasons, but perhaps the single greatest benefit is protection from lawsuits that could affect your personal assets and wealth. Similarly, if your business is sued, only the business assets are exposed. Additionally, forming an LLC offers a certain amount of anonymity. If assets are placed in your personal name, it is quite easy to locate those assets, thereby exposing them in the event of a lawsuit. Putting assets in your LLC better protects you because a lawsuit may be deterred if no assets can be located in your name.
Limited Liability Companies offer a wide range of tax deductions, including health insurance deductions, travel deductions, automobile deductions, entertainment deductions, and many more. Perhaps the most advantageous deduction is the pension plan or 401(k), as money placed in one of these is tax deductible and can grow tax-free.
There is also a certain amount of credibility that comes from creating an LLC. It shows your customers that you are serious about your business and plan to be here for the long haul. It is also comforting for a patron to know that they are working with a legitimate business that has governing documents and must adhere to the guidelines set out by regulatory agencies.
How do I go about forming a Limited Liability Company?
Creating an LLC is a relatively simply thing to do, but it can seem like a daunting and overwhelming task to someone inexperienced. There are some documents that must be executed in order to initially set up a LLC; additionally, there is some yearly maintenance that must be done in order to keep your LLC in good standing. While there are some annual costs associated with having a LLC, the tax benefits alone can pay for the expense.
Vann Dixon, CPA, P.C. has years of experience in business creation. We can both set up your LLC initially, as well as maintain the necessary annual paperwork. Call or email us today regarding a free consultation.