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Limit your Exposure to Personal
Loss by establishing a LLC or Limited Liability Company.
What is an LLC?
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The term LLC stands for limited liability company.
It is a popular form of business setup that
is particularly popular for home based businesses
and the self employed as it is a mix between
a corporation and a partnership having some
of the benefits of both. First introduced in
1977 the main advantage of an LLC is the fact
you can separate your personal and business
liability.
An LLC works much the same as a standard partnership
in that all the
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business owners or share holders have an equal say in
the company.
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Having an LLC (limited liability company) can Cost
You:
Working under your own name or a dba (doing business
as) has distinct disadvantages. First of all, you
are paying for all your goods and services with after
tax dollars. An LLC on the other hand can write off
all purchases of goods and services as a business
expense before taxes. Secondly as an individual you
are taxed multiple times more than a corporation would
for the same income. And third you are totally exposed
in terms of liability – everything you own in
essence is totally in full view - free for the taking
on the slightest excuse. A successful lawsuit against
you can lay claim to all your personal property, all
that you or your family business have built up through
a lifetime(s) of hard work.
LLC
Benefits
An LLC corporation is one of the first steps one
can take to achieve peace of mind knowning that
all your personal property is not exposed through
any litigation taken against your business. Use
it to write off all your business expenses to reduce
your taxable income and enjoy a much lower tax rate
then you would by doing business in your own name.
You can incorporate in your own state or go out
of state to establish a limited liability company.
Getting incorporated out of state by getting a Texas
LLC, an Oklahoma LLC or a Nevada LLC may have tax
and other distinct advantages. Here are some links
where you can get a further explanation of llc’s
and some more information on why one might consider
incorporating out of state: Texas LLC, Oklahoma
LLC and Nevada LLC.
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