If you are an entrepreneur, your business can be operated as a sole proprietor, or it can be operated as a formal structure, for example an LLC. Forming a LLC as the business structure is an excellent choice for most businesses. Running your operation as an LLC brings many benefits.
Following are five benefits you see when you consider having an LLC:
1. Protection of personal assets – If you own a business, you are more apt to be sued. You need to protect your personal assets from those of your business, so your personal monies are untouchable if your business is sued. Protection is generally offered by start a LLC that is properly setup.
2. Project a professional image – Nothing says trustworthy company like an actual business structure. Just about anybody can start a company, but it is those that take the extra step of setting up a business structure show how serious they are about their company, and customers see this.
3. Gain trust – If your business is an LLC, you are making it particularly easy to discover vendors in which to do business with you, and a lot easier to get a business loan. Operating your company like a business, and not a side venture, is a great way to gain trust with those other businesses that you need to deal with.
4. Less chance of being audited – Sole proprietorships are more at risk to facing an IRS audit than LLCs are. This most likely is due to the probability that a person might be using the business as an excuse to just get some benefits on their taxes and the IRS knows this. The thought is that if a person goes to the effort of form a LLC, it is likely they are in business for all of the right reasons.
5. Flexibility – With an LLC, there are more options in how you want to manage your operation. Adding additional owners is a simple process, which you cannot do as a sole proprietor. A limited liability company is a very adaptable business structure which gives you plenty of options on how your company should be run.
As an entrepreneur, you should do what you can to operate it as affectively as possible. Choosing a limited liability company as your business structure has multiple advantages, even more than those listed above. Take your company seriously and use a limited liability company structure.