Starting an LLC can have plenty of benefits for your company. While each business model has its benefits and drawbacks, LLC’s have become increasingly common because of their intrinsic compatibility with the modern business model. Here are five benefits of forming an LLC and what it will take to register your company:
- You Have Help: Starting a company on your own is extremely difficult. When you have a partner or associate who is willing to help with the details, they help shoulder the burden of leadership.
- Tax Breaks: Limited Liability companies experience pass through taxation which means that the owners and board members will be taxed based on their personal earnings, but the company will not have to pay taxes at all.
- Structural Flexibility: While traditional corporations require a rigid structure that includes a board of trustees, LLC’s have more flexibility and can often get away with choosing their own government structure.
- Less Paperwork: Because corporations have a strict structure, they have plenty of paperwork that needs to be filed before your business can operate.
- Personal Protection: Board members and partners within the LLC do not hold personal responsibility for company losses. This means that if your company is sued, you will not be personally liable for the losses.
How to Get a Federal Tax ID: When registering your company, you will need to fill out plenty of LLC forms. Fortunately, you can apply for your EIN or Tax ID online without the hassle of having to mail paperwork. In addition to registering your company on a federal level, you’ll need to register with your state. Once you receive your Tax ID, you can use that ID to open lines of credit for your new LLC.
LLC’s have plenty of benefits and are fairly easy to open. However, the ultimate choice of the best business model will depend on your business.