If starting a business is on your New Year’s agenda, what kind of corporate entity makes the most sense for you?
Forming an LLC, a Limited Liability Company, is a type of business structure that combines the traits found in a sole-proprietorship with those of a corporation. An LLC is eligible for the pass-through taxation feature of a partnership or sole proprietorship, while at the same time limiting the liability of the owners. Because the LLC is not considered a separate entity, the company does not pay taxes or take on losses. Instead, this accommodation is made by the owners who report the profits, or losses, associated with the business on their personal income tax returns. In addition, membres of an LLC are protected from personal liability associated with the business in the same way corporations are.
An LLC might be what you need but there are advantages and disadvantages of other corporate structures to consider as well. If you’d like to talk over the pro’s and con’s of company structures with a business formation expert, call The Startup Store today at 404-381-1550.