Why do I need an LLC?

Here are some essential LLC facts that small business owners should know:

1. Liability protection: One of the main reasons to form an LLC is to protect your personal assets from the liabilities of your business. If your LLC is sued or faces financial trouble, your personal assets (such as your home or savings) generally cannot be used to satisfy the LLC's debts or obligations.
2. Pass-through taxation: LLCs are not taxed as a separate entity. Instead, the profits and losses of the LLC "pass through" to the owners' personal tax returns, where they are taxed at the individual level. This can help small business owners avoid double taxation.
3. Flexibility: LLCs offer a lot of flexibility in terms of ownership, management, and operations. For example, LLCs can have multiple owners (known as "members"), who can be individuals, other LLCs, corporations, or other entities. LLCs can also choose to be member-managed (where the members run the business) or manager-managed (where the members hire someone else to run the business).
4. Limited lifespan: LLCs have a limited lifespan, which means that they generally dissolve if one of the members dies, leaves the LLC, or files for bankruptcy. However, many LLCs have provisions in their operating agreements that allow the LLC to continue operating even if one of these events occurs.
5. State-specific requirements: LLCs are governed by state law, which means that the requirements for forming and operating an LLC can vary from state to state. It's important to understand your state's specific requirements for forming and operating an LLC, such as filing fees, annual reporting requirements, and tax obligations.
6. Separate legal entity: An LLC is a separate legal entity from its owners, which means that it can enter into contracts, own property, and sue or be sued in its own name. This can provide additional legal protections for small business owners.

These are just a few of the essential LLC facts that small business owners should know. Reach out to us to if you'd like to learn more about if an LLC is right for you or if you'd like for us to setup your new LLC for you!

‍