I bet you’ve heard a thousand times that it’s a smart business move to create an LLC for your business. Or, maybe you already have an LLC, which is a great start. As we approach the end of the year, now is the best time to consider the pros and cons pros of creating an LLC for your business. Keep reading for 4 reasons why forming an LLC is a smart business decision.
1. Minimize Tax Burden
Chances are you won’t be very profitable the *second* you start your business. Building up a business takes time – you may even have some losses. To soften the blow, entrepreneurs strategically form an LLC. Why? Because the losses of the business flow can be used as deductions for other income.
2. Customize Your Business
LLCs are great because they’re adaptable. Whether you have two employees or 50 angel investors, you can write an operating agreement to suit all your needs and the intricacies of your business.
3. Segregate Assets
Another advantage is that an LLC has dual liability protection that shields your investments from the frivolous lawsuits filed against you. That means your business liability is limited to the business which protects your personal assets. It also works the other way. For instance, if you get sued after getting into a fender bender of some sort, your business holdings can’t be seized or liquidated if held in an LLC.
No one plans to get sued, but it happens to business owners every day. Similarly, all business debts will be attributed to the business, not you personally. Protecting yourself from future legal battles is the best insurance possible.
4. Shield Intellectual Property
Intellectual property (IP) is your business ideas and the works or processes that stem from those ideas. It’s your personal edge and best asset. IP theft destroys new businesses and startups – how many times have we seen business ideas stolen? Nick Cannon, I’m talkin to you. If you form an LLC, you will keep control and have the capability to license it to other businesses and make a profit. I call that a win-win.
Yes it costs money to form an LLC – you gotta pay the state and your attorney or accountant to help you set it up and maintain it. But did you know, forming an LLC can save you loads of cash in the long run? This is the perfect time of the year to start to implement tax-saving strategies in your business. That’s why I’m hosting a workshop on December 16th at 11am PST. During the 90 minute session, you’ll learn why an LLC makes sense and how it can cut your annual tax bills. Space is limited. Secure your spot today. 3 Money Saving Tax-Strategies for your LLC!
To more money in your pockets,
Chika
