As a business owner, you can run your business as a sole proprietor or as a formal structure, such as an LLC. Forming an LLC as a business structure is a great option for the average business owner. Running your business as an LLC brings many benefits.
The following are just a few of the many reasons to consider owning an LLC, if you are a small business owner:
1. Personal Asset Protection – As a business owner, you are more likely to be sued. You must protect your personal assets from those of your company, so your personal money is protected in the event that a lawsuit is filed against your company. By starting LLC that is configured correctly, you are generally protected.
2. Have a professional image: Nothing says a professional company like a legitimate business structure. Almost anyone can start a business, but it’s the people who go the extra mile by setting up a business structure that show how serious they are about their business, and people pick up on this.
3. Trust – If your business is an LLC, you’re making it particularly easy to find vendors to do business with, and particularly easy to obtain a business loan. Operating your business as a profession, and not as a hobby, is a wonderful way to earn the trust of those companies you need to work with.
4. Low Audit Risk – Sole proprietorships are more at risk of facing an IRS audit than LLCs. This most likely has something to do with the fact that a person could be using the business as an excuse to get some tax breaks, even though they would get more if they actually had an LLC and the IRS is after these people. However, if a person has made the effort to form an LLC, chances are he is in business for all the right reasons.
5. Business Flexibility – When you operate as an LLC, you have more options on how to run your business. Adding additional owners is a simple process, which is not possible as a sole proprietor. A limited liability company is a very flexible business structure that provides a variety of options for how you want to run your business.
If you are going to run a business, then you need to do what you can to run it as effectively as possible. Making use of an LLC as a structure for your business has many potentialities, even more than those listed in this article. Treat your business right and turn it into an LLC.
