Kennewick Limited Liability Company Lawyers
If you are thinking about starting a business or the current structure for your company, such as a sole proprietorship, is no longer working for you, there are many benefits to forming a limited liability company (LLC). By forming an LLC you can protect yourself while also serving your customers or clients and making a profit. Below, our Kennewick LLC lawyer outlines the benefits of this type of business structure.
Protection from Personal Liability
One of the main benefits of establishing an LLC is that it will separate all of your personal assets from the company. This protection extends to your vehicle, your home, and savings if your business ever defaults on a loan or is the subject of a lawsuit. The only exception to this is you sign a personal guarantee for business financing. If you have signed such a guarantee, creditors can hold you personally liable for paying your business’ debt.
Easy to Establish and Affordable
Forming an LLC is relatively inexpensive, as the cost usually hovers around $1,000. They are also relatively easy to establish and require minimal paperwork. You must also file articles of organization and an operation agreement, which details the ownership structure of the new business. LLCs do not have to file an annual report every year nor must they hold a yearly shareholders meeting.
Flexible Profit Division
Members of an LLC can also determine how to share profits among themselves. This is different from a general partnership in which profits are divided equally among all partners. With an LLC, the division of profits is outlined in the operation agreement. If one member contributes more sweat equity or invests more of their own money upfront, the agreement could stipulate that they are to receive a larger share of the profits. LLCs also do not cap, or limit, the number of owners that can be part of the company. Unlike a corporation, LLCs are not required to maintain a set of officers or a governing board of directors.
Flexible Taxation Options
Establishing an LLC provides you with multiple options on how you want to be taxed. Unless you choose for your company to be taxed as a C corp, you will not have to pay corporate taxes. Instead, profits are passed to the owners as their personal income. This process is known as pass-through taxation, and can help you avoid being taxed twice – once at the personal level and once at the corporate level.
Appropriate for Sole Owners
LLCs can be multi-member companies, but that does not always have to be the case. Individuals can also reap the benefits of forming an LLC to shield themselves from personal liability and to take advantage of the flexible tax options, as well.
Our Kennewick LLC Attorneys Can Help You Form Your Business
If you are about to start a business, our Kennewick limited liability company lawyers at Moulton Law Offices, P.S. can help with the formation so you and your company are protected. Call us now at 1-509-328-2150, #9090 or fill out our online form to schedule an appointment and to learn more.