Five reasons businesses love LLCs
LLCs have become extremely popular business forms in recent years. Compared to other forms of companies, LLCs are relatively new. They started in Wyoming in the late 1970s. Here are five reasons that people love LLCs.
1. Limited Liability.
The two Ls in LLC stand for limited liability. Essentially, by having an LLC, a business can separate its assets from the individual owners’ assets. Through limited liability, business owners can protect their personal wealth if the business does not do well.
2. They’re Cheap
What does this liability protection cost? Generally: not much. The government fee for organizing an LLC varies from state to state. But in Virginia, the fee is only $100, which is pretty inexpensive for the amount of protection an LLC can provide.
3. Not taxed twice
People have complained for years that corporations are “double taxed.” The corporation is taxed on its earnings. And the shareholders are also be taxed on their dividends. But LLCs can avoid have this problem. An LLC is what is referred as a pass-through entity. The IRS essentially ignores the entity avoiding double taxation.
4. Easy filings
Corporate filings can become quite complex. LLCs tend to have far simpler filings that can be filled out quickly. Small businesses (and business of all sizes) really tend to like the easier form.
Much of what happens in an LLC is up to the owners. Owners of the company can make an operating agreement. And this agreement defines what the company is like and how it works.
So LLCs offer great flexibility and asset protection at a very reasonable price. If you are interested in an LLC, contact an experienced attorney and see if an LLC is right for you.