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Is Forming An LLC Worth It?

Forming An LLC Worth It

So you want to start a business, huh? Well, that’s great! You’re about to embark on an exciting journey. However, before you jump right into it, there are some things you should know. One of these is the decision of whether or not to form your own LLC. When starting a small business and deciding how much liability protection you need for yourself and your company, oftentimes the answer is “a lot.” This post will show why forming an LLC could be worth it for your new business.

What Is An LLC?

A limited liability company is a form of entity that protects the personal assets of its members. The LLC provides more protection than an individual proprietorship or general partnership because it has not just one, but two levels of legal entities: one for the business and another for individuals with ownership of the company.

LLCs protect both the owners’ personal assets and the company’s, making it much easier to recover from a lawsuit.

Why You Should Form An LLC

The incorporation of a limited liability company can be an attractive option for the sole proprietor who wishes to limit their personal liability or for small business owners with multiple shareholders. Many guides suggest that you should start an LLC, however, it is important to understand all of the legal and financial implications before making this decision. Incorporating your small business may seem like the logical next step in its growth, but there are many factors that you need to take into account before deciding on this form of protection.

Advantages Of Forming An LLC
Disadvantages Of Forming An LLC
When Should You Form Your LLC?

Forming an LLC should only be done after you have explored the other options and considered what is best for your business. You may want to form one if:

How Much Will It Cost To Form An LLC?

It is difficult to give a specific figure for the cost of incorporating your small business because it will depend on several factors.

The state in which you live, and whether or not there are any local taxes that apply. For example, California charges an annual fee when filing its Articles of Organization with the Secretary of State’s office.

Questions You Should Ask Yourself Before Starting An LLC

The decision to form an LLC should only be made after you have explored the options and considered what is best for your business. If you want to limit your personal liability, are seeking more tax benefits than that of a sole proprietorship, or just need help running day-to-day operations when necessary, then forming an LLC may be worth it!

 

 

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