One of the most important aspects of starting a business is choosing the entity that offers the most benefit to your business. Limited Liability Companies are considered as the most commonly preferred business establishments from various fields. Limited liability is known for its legally recognized perpetual business entities. LLC incorporation is easy, simple and fast. LLCs combine the flexibility of a partnership with the liability protection enjoyed by corporations. There are many advantages to forming an LLC instead of a corporation.
One of the biggest benefits of forming an LLC is that you have a choice about how to pay taxes. The LLC tax rate depends entirely on the income of the owner. Under the Corporate treatment option, if you have higher income, you will get lower tax rates.
Personal Property Protection
By forming an LLC, you can protect your personal assets from those of your company, if any lawsuits are filed against your company. Therefore, LLC makes sure your asset is protected
No double taxation
Corporations are subject to double taxation, where the corporation pays corporate-level taxes first and then on income that is distributed as dividends. LLCs are not subject to double taxation like Corporations. Business income is reported on your personal income tax return and is eliminated once. You can approach a business tax preparation company near you to learn about the procedure for filing.
Low audit risk
Sole proprietorship faces more IRS audit risk than LLC. If you have put in the effort to form an LLC, then you are in the business where there is less IRS audit risk.
If you are running an LLC, then you have a wide variety of options for running the business. You can easily add members to your business without many formalities like in corporations. A Limited Liability Company is a flexible business structure that gives you a variety of options for running your business.
If you are running an LLC, you can lease your personal assets to the company. This means that you can manage your LLC from your home office and show yourself as the LLC that rents the office to you. By doing so, you can write off business expenses and improve your financial situation. To do this, you need a formal lease.
Forming an LLC as a business structure is the best option for an average business owner. If you are running an LLC business, contact your nearest Small Business Tax Services Company to run your business effectively.