Whether you’re a sole proprietor, thinking of launching a startup, or are already getting a small business off the ground, you might have been considering whether or not it’s worth it to start an LLC.
There are genuine pros and cons to every decision as an entrepreneur. But when starting an LLC, the advantages far outweigh the few downfalls. With this, the primary downfalls generally surround the paperwork and process of getting an LLC registered in your state.
Nevertheless, let’s take a deeper look into the compelling benefits of starting an LLC.
Personal Liability Protection
The most notable benefit of starting an LLC is that you will have personal liability protection; this means that your personal finances will no longer be at risk if your LLC should go into debt or experience any kind of legal confrontations, such as being sued.
As a sole proprietor, you won’t have this kind of protection, and your personal finances will be at great risk if anything goes wrong with your business.
Even so, it’s still crucial to know that you can be denied this kind of protection if you infringe on the LLCs corporate veil. For example, if you decide to merge your personal finances with that of your business account, you’ll lose personal liability protection.
More Tax Options
Tax obligations are enough to leave anyone feeling disgruntled and done in by the government. However, employees typically experience more frustration when tax season rolls around because they don’t have as many options.
If you start an LLC, you’ll be open to an entirely different tax structure, which could have you paying less during tax season than ever before. You’ll also enjoy more incentive programs and a bit more grace from the IRS.
Affordable To Start
You’ll notice that starting an LLC is also pretty affordable. Moreover, maintaining an LLC is also relatively pocket-friendly, which makes this business program ideal for small businesses, startups, and sole proprietors.
Your main cost in this regard will be filing fees for the state, which will vary depending on which state you reside in.
It’s Easy To Form
While there is a lot of paperwork and a process behind forming an LLC, it’s still not that challenging or time-consuming.
With this, there are also LLC services that will guide you through the process and handle most of the details for you.
Credibility As A Business
Starting an LLC will also give your business a lot more credibility. As a sole proprietor, you won’t have this benefit, as you’ll be viewed as a sole entity without liability protection.
Your target audience and your consumers will find an LLC a lot more credible, which boosts the business reputation by providing consumers with peace of mind. Starting an LLC proves to consumers that you do take your company and your venture as a business owner seriously.
In conclusion, starting an LLC has far more compelling benefits than remaining a sole proprietor or unprotected startup owner.
