There are several business structures that you can use to operate a business as. You can be a sole proprietor, or you can choose another business structure such as an LLC. An LLC is an excellent choice when it comes to a small business structure, as it offers many advantages over being a sole proprietor.
As a small business owner, you should consider forming an LLC for the following 5 reasons:
1. Personal liability protection - As a business owner, you may be a large target for a lawsuit. You need to shield yourself personally from your business, so your personal assets are protected in case a lawsuit is brought against your business. A properly setup LLC offers this protection.
2. Project a professional image - Customers tend to want to do business with a company that has a professional image, and operating your business as an LLC helps with this. Anyone can say they are a business, but only those that are serious go to the extra effort to setup a proper business structure.
3. Trust - If you are an LLC, then it is a lot easier to find vendors to do business with you, and a lot easier to get a bank to lend you money. Operating your business like a business, and not a hobby, is a great way to gain trust with those companies that you need to do business with.
4. Low audit risk - Sole proprietors are more at risk to be audited by the IRS than LLCs. This most likely has something to do with the fact that someone might by saying they are a business to just get some tax benefits (which are actually greater as an LLC) and the IRS knows this. However, if someone goes to the trouble of forming an LLC, then they are most likely in business for all of the right reasons.
5. Flexibility - With an LLC, you have greater flexibility in how you want to run your business. You can also bring on additional owners very easily, which you cannot do as a sole proprietor. An LLC is a very flexible business structure that gives you plenty of options on how you wish to operate your company.
The LLC business structure offers many advantages over other structures, especially the sole proprietorship. The above 5 reasons just scratch the surface as to the reasons why you should really consider operating your business as an LLC. - 15246
As a small business owner, you should consider forming an LLC for the following 5 reasons:
1. Personal liability protection - As a business owner, you may be a large target for a lawsuit. You need to shield yourself personally from your business, so your personal assets are protected in case a lawsuit is brought against your business. A properly setup LLC offers this protection.
2. Project a professional image - Customers tend to want to do business with a company that has a professional image, and operating your business as an LLC helps with this. Anyone can say they are a business, but only those that are serious go to the extra effort to setup a proper business structure.
3. Trust - If you are an LLC, then it is a lot easier to find vendors to do business with you, and a lot easier to get a bank to lend you money. Operating your business like a business, and not a hobby, is a great way to gain trust with those companies that you need to do business with.
4. Low audit risk - Sole proprietors are more at risk to be audited by the IRS than LLCs. This most likely has something to do with the fact that someone might by saying they are a business to just get some tax benefits (which are actually greater as an LLC) and the IRS knows this. However, if someone goes to the trouble of forming an LLC, then they are most likely in business for all of the right reasons.
5. Flexibility - With an LLC, you have greater flexibility in how you want to run your business. You can also bring on additional owners very easily, which you cannot do as a sole proprietor. An LLC is a very flexible business structure that gives you plenty of options on how you wish to operate your company.
The LLC business structure offers many advantages over other structures, especially the sole proprietorship. The above 5 reasons just scratch the surface as to the reasons why you should really consider operating your business as an LLC. - 15246
About the Author:
Author, and business owner, Caressa Waechter thinks that you should form an LLC when starting a company. Her website has reviews of companies that form LLCs: Forming LLC
