When an individual decides to start their own company, choosing the format of the company is the first big step. As a businessman, you can decide whether you want to go for a sole proprietorship where you will be the only one in charge or if you could go for a corporation where there are other owners as well. An LLC or a limited liability corporation is one where the taxation process limits the liability of the corporation. Essentially a combination of a traditional corporation and sole proprietorship, this business model incorporates features of both the previously mentioned business structures. Like in the case of sole proprietorships, the company is taxed along with the personal assets of the owners to a certain extent, and just like in the case of a corporation, an LLC is also liable to a specific degree.
An LLC is basically the American counterpart of a private limited corporation and can be a great way of taking your business global. That being said setting up an LLC is not an easy task. Incorporation services can be of tremendous help in this context. These agencies play a crucial role n the overall success of your company. However before you take the plunge and choose on getting an LLC in Delaware for instance, it is crucial that you weigh the pros and cons of a limited liability corporation over the other business structures.
Why Would an Individual An LLC Over Other Business Structures?
There are a number of reasons why an; could be the perfect flagship project for you. Even leaving aside the benefits from an ownership and taxation point of view, managing the organization can also become so much easier. Some of the biggest perks of choosing an LLC are as follows:
Taxation: A huge advantage of a Delaware Limited Liability Corporation is the perks related to taxation. Since you can be taxed as either a sole proprietorship, corporation or partnership, you can analyze and decide which tax policy benefits you the most. Unlike other business models where there is a pre-determined mode of operation, an LLC gives its owner the right to choose how they want to pay their taxes. This flexibility can be a game-changer in the world of business.
Membership: It is a known fact that any company needs manpower and human resource for its smooth sailing. An LLC can have any number of members starting from just the owner to as many helping hands as needed without any upper limit. Most importantly, you do not need to have any specific number of staff members at the very onset which means that you can hire as per your requirements without any external pressure. And the members are protected from most of the legal issues that might occur later on in the company.
Management and Documentation: A limited liability company can be managed either directly by the members or by a manager who has been specifically chosen for fulfilling the managerial responsibilities. This means that you get to decide whether you need a manager in the first place and then hire accordingly. The filing and documentation are also relatively simpler with lesser paperwork and more adjustability
