As a business owner, you can run your business as a sole proprietorship or as a formal structure, for example an LLC. Incorporating an LLC as a business structure is an excellent option for the average entrepreneur. Running your business as an LLC brings many benefits.
The following are just a few of the many reasons to consider having an LLC, if you are a small business owner:
1. Protection of personal property – As a business owner, you are more likely to be sued. You need to protect your personal assets from those of your business so that your personal money is protected in the event of a lawsuit against your business. By starting LLC that is configured correctly, you are generally protected.
2. Have a professional image – Nothing says professional company like a legitimate business structure. Almost anyone can start a business, but it’s people who go the extra mile when setting up a business structure, which shows how serious they are about your business, and people realize this.
3. Trust: If your company is an LLC, you are making it particularly easy to find suppliers with whom to do business with you and, in particular, to obtain a business loan. Operating your business as a profession, not a hobby, is a wonderful way to earn the trust of the companies you need to work with.
4. Low Audit Risk – Sole proprietorships are at higher 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 benefits, although they would get more if they actually had an LLC and the IRS was on these people. However, if a person has made the effort to form an LLC, they are likely 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 offers a variety of options for how you want to run your business.
If you are going to run a business, you must do everything you can to do it as efficiently as possible. Using an LLC as a business structure has many virtues, even more than those listed in this article. Treat your business well and turn it into an LLC.