There are several tangible benefits that you can get by setting up your business under the umbrella of a Limited Liable Company (LLC). From protecting your personal assets to having less paper work, there are many advantages that an LLC has over a traditional corporation.
#1 Provides you with the Range of Options of Asset Protection
People who are first timers in running a business, often get in trouble when they have to face the wrath of creditors as soon as they suffer losses. It usually happens because they have business assets in their names and that gives clear passage to the creditors to meddle and even take control of their business. However, when you are operating your business under the hood of LLC, then technically, you do not own any business asset in your name and that restricts creditors from taking any extreme step.
LLCs can also provide you with personal asset protection by owning a blanket mortgage in all you assets. Unlike traditional mortgages, blanket mortgages have a release clause which helps in paying the loan partially. To get the most out of blanket mortgages, you can set up an LLC because then you will owe money to LLC and that feature is considered as the added protection.
#2 Unlimited Ownership
Many people are reluctant to start any business because they are afraid of the liabilities that are attached to any business and that are why they don’t want to foray into it solely. If you don’t want to be a sole proprietor then form an LLC, it provides you with getting as many people on board as you want.
#3 Allows you to manage your Business Operations Flexibly
We know that how much of a precious time of corporations and businesses get consumed in having board meetings and other strict requirements that they have to follow. These guidelines that traditional corporations are required to follow are not necessary for LLCs. Therefore, with the management flexibility that is offered by an LLC, you can run your business without setting up a board of directors and without worrying about the hassle of arranging any unnecessary annual meetings.
Tax Leniency and Flexibility
A feature that makes it LLCs so popular among people is the tax benefits that they can get by forming an LLC. The IRS gives the members and owners of LLC to choose how they want their LLCs to be taxed and in the start of any LLC, it is not taxed directly either. However, IRS provides different tax criteria for different type of LLCs.
For instance, LLCs with a sole owner are not taxed directly and instead taxed through the federal tax returns of the individual. LLC with several elected partners is taxed like any business partnership and if one wants his LLC to be taxed as a corporation then he can fill it as a corporation with IRS.
These are few of the benefits that you can get from picking a Limited Liability Company as your preferred business structure.