Getting Started with a Limited Liability Corporation

You want to start a business.  Maybe you and your best friend have a great idea for a knitting shop or comic book store for your small town.  Before you move forward you have to decide what type of business entity you will choose to begin.  You will most-likely be looking at either a partnership or a limited liability corporation, or LLC.  There are benefits to both entities but generally speaking we tend to promote the LLC over the partnership for a few key reasons.

1. The IRS allows you to choose either a corporation or a partnership, depending on which better serves your business tax-wise.  These are state entities and not federal so it has no effect on your federal tax in any adverse way, and actually offers you options.
2. They’re cheap to set up.  For between $300-500 you can have your business incorporated through your state board.
3. They offer legal protections. An LLC enables you to separate your personal finances from business obligations.  Should your business fail the debts incurred by that business would not fall on your family to pay, nor would any legal liens or obligations be placed on you or your family’s property or finances.
4. They end at death or dissolution. Depending on how you view a business, it could also be an asset to have it end at your death without your family having to bear the burden of managing or assuming leadership.

LLCs are perfect for most business situations.  They are a versatile entity with multiple benefits. And you can even start immediately, check out a review of My New Company and their online system.