The Benefits of Creating a Limited Liability Company
Before discussing about the benefits part, let’s look at the limited liability company definition. A LLC or limited liability company is flexible format of any business that combines elements of corporate structures and partnership. It is considered to be a legal form of company which renders limited liability to its owners in United States. The LLCs are considered to be a popular choice for most of the small or medium size businesses as compared to any corporation or partnership. Of late, you can find this idea getting very popular in a number of states in United States. You can now see a number of people starting a business in Florida, seeking the help of some big or small business lawyers and enjoying the benefits of it. Whether you are about to start any business or currently have the sole proprietorship or simply run a business on general partnership, you can certainly enjoy a number of benefits of incorporating a limited liability company in your business. There are many business owners who count the option of LLC as an expensive choice; however, this is not the case. Let’s discuss the benefits of creating a LLC or a Florida limited liability company. The following are the few:
LLCs render limited liability protection to their owners (members), who generally do not have any role in the business debts and liabilities. The creditors are not able to pursue the personal assets (like saving accounts, house, personal property etc.) of the owners to pay business debts. On the contrary, in any sole proprietorship or general partnership, the owners and business are legally considered the same, leaving aside the personal assets which are vulnerable.
Pass through taxation
The LLCs generally do not pay taxes at their business level. You will therefore find any business profit or loss passed over to the owners and is reported on their personal income tax returns. And for any reported tax due, it has to be paid at the individual level. In this way, you can enjoy greater tax flexibility with LLCs.
Heightened reliability and credibility
By creating a limited liability company, it can support you in establishing your new business with good reliability and credibility with your potential clients and customers along with other people like your vendors and business associates or partners and employees. This is due to the fact that they all see you in a formal commitment to your business.
Lesser limited compliance requirements
When you create an LLC, you do not have to put yourself in a number of state imposed yearly requirements and other ongoing formalities except the few like S corporations and C corporations. In this way you have just a few requirements on your annual basis for your business with an LLC.
Flexible management structure
An LLC promises a flexible management structure. Therefore you do not have the burden to establish any organizational structure agreed upon by the business or company owners. The LLCs can be easily managed by number members (or call it owners) or by the managers. Hence you can avoid positions like board of directors which are often found at places like the corporations who are required to be consulted for any major or big business decisions of the company in order to manage the day-to-day affairs.