LLC Incorporation for the Entrepreneur
There are certain possible liability implications that you need to be aware of if you are thinking of starting, or already have started, a business. There are possibly greater legal liabilities you are exposed to as a small business owner that you did not have to consider before you owned a small business.
One other issue that you have to think about when you own a business is taxes. Small business taxes are handled in a different way than personal taxes, so you have to be aware of what is happening with your business taxes. Of course, this is where an accountant can come in real handy.
Operating your business as a sole proprietor is an option, though it is not usually the best decision. There are huge liability and tax reasons why you should not be a sole proprietor. Talking to a professional about these issues is highly recommended.
So what should the average business owner do? Smart small business owners create a business entity to shield themselves from personal liability and to take advantage of corporate tax laws.
A very common business structure, and probably the best choice for most small business owners, is to consider start an LLC. A limited liability company, or LLC gives you liability protection personally, assuming it is set up correctly and you totally separate your business and personal finances. Also with an LLC, you have the ability to can pick how you should be taxed.
Forming an LLC is very easy. Generally, the more expensive option is paying a lawyer to set up your LLC. Or, you can use a reputable online business creation services for form a LLC. With prices starting at $115, there is really no excuse to not form an LLC for your business.
Always talk with a professional to make sure LLC form is the right structure for your small business. The least you should do is take some action to make sure that your business is separated from you, so you reduce your potential liabilities and take advantage of the tax benefits of owning your own business.
