Why Register Your Startup As a LLC
Limited Liability Companies (LLCs) are increasingly becoming popular in recent years. The COVID pandemic and the effects of the Great Recession will leave a lasting impact on most economies. However, people remain optimistic about the political and economic environment. If you also have your eyes set on starting a business, it is essential that you pay attention to the business’s structure irrespective of the industry.
As you plan to go into business, there are many reasons why you should consider registering your enterprise as a limited liability company using the best llc services. This article outlines some standout reasons why you should register your startup as a LLC.
No Double Taxation
One of the main reasons why investors prefer LLCs is that it helps them avoid double taxation. LLCs are taxed more like a sole proprietorship type of business. Ideally, this means that you are only required to pay taxes on your profits. In case your business has multiple classes of shares, only the LLC is taxed, meaning that owners get to enjoy the remainder without worrying about double taxation.
Easy Registration
It is relatively easy to start a LLC. You can even handle the registration process without hiring an attorney. Ideally, you only need to register the LLC with the state subject to a small fee, along with some routine checks such as applying for an employer ID, opening business bank accounts, and completing some business checks. It is worth noting that the process might differ depending on the jurisdiction you want to register your business.
Easy to Make Changes
Another attraction towards LLCs is that they are quite flexible. For instance, you can bring new shareholders on board or even sell the entity to another investor. This is quite different from the corporation model that requires minutes before board decisions are made. General, LLCs are subjected to fewer restrictions on administrative duties over other business structures.
Assets Are Protected
Startups prefer the LLC model because it protects their assets against potential suits directed at the business. Any business venture is risky to start, and choosing the LLC model saves you from some unexpected eventualities. This business model is particularly suitable for startup considering that it tends to limit business operations differently. So as the business grows, owners can then convert the LLC to a corporation.
