A limited liability company is one of the many ways in which you can form a business. Typically, this gets pitched up against the idea of forming a corporation. While we won’t go into too much detail on this other option, we will touch upon it a few times in this post.
Effectively, as the title suggests, we’re looking at the benefits of forming an LLC. So, what are they?
Cheaper than a corporation
A corporation offers similar benefits to an LLC, but one key difference is that an LLC is much cheaper to run and set up. You can find LLC services on strategyplus that will help you set everything up in no time at all, for a very decent fee. Then, running your business as an LLC will require fewer ongoing fees, making it a popular choice for the majority of small businesses.
Protection for the business owner
As the name suggests, an LLC provides you with limited liability. What does this mean from a business owner’s perspective? If you own an LLC, you are not personally responsible for things that happen to your business. For example, if you get sued or end up in debt, it isn’t your personal fault and you can’t be personally held liable for this. It offers a degree of protection in your favor, protecting your personal assets and finances from being torn apart. In a situation where your business is in debt, the lenders can’t get money from your personal accounts to pay for it.
Extremely easy to form
We’re mentioning corporations again, and that’s because an LLC is so much simpler than one of these. With a corporation, you need to have so many different things set up and in place to legally form. As an example, you need officers, directors, a board, and even shareholders. There is so much admin that goes into all of this, but an LLC doesn’t require it. Granted, some documents are needed for an LLC, but they’re very basic things that all business owners should have already.
A boost for your brand
The final benefit of forming an LLC is that it’s good for your brand. When you form your company, you can have an official business name. It makes you look so much more professional, which instantly shoots your brand higher into the stars. Customer trust is absolutely everything!! If customers trust your business, they are willing to keep coming back and spending money. Building trust is all about doing small and simple things to get people to recognize that you’re a decent business. Forming an LLC is one of the simplest ways to build a little bit of extra trust with consumers.
LLC’s aren’t without their disadvantages, but that post can be saved for another day. One question you may be asking is who should form an LLC? Is it suitable for all businesses? Yes, anyone with a business can form an LLC, particularly if you want legal protection. Also, it’s worth noting that some businesses are legally required to form LLC’s in certain states, but you should inquire with your local government about that.