If you are thinking about starting a small business, you may want to think about its structure. Many entrepreneurs in Minnesota find that incorporating or forming LLCs are the most beneficial way for them to run their companies with minimal personal risk. According to LegalZoom, LLCs offer flexibility unlike corporations and are often much easier to manage because there are fewer requirements and rules to adhere to.
Before you decide to file the papers for your business, you should take some time to consider if this type of business structure is right for your company. In addition to reviewing your goals, take some time to review the following three key benefits that LLCs offer.
Many business owners find that it is easier for them to secure business funding, new clients and legitimacy by adding an Inc. or LLC to their company’s name. It also helps to define their business making it easier for them to build their brand. Not forming an LLC does not prevent you from accomplishing the same goals. However, it is often challenging to establish your company’s authority without taking measures to protect your company’s brand name.
Even though it may not be on your mind now, at some point in the future, you may decide to change ownership of your company. Forming an LLC makes it possible for you to sell and transfer ownership to another partner or party for any reason without having to restructure or reorganize your company. There is no penalty for doing so.
Protects your personal assets
An LLC shelters personal assets from most business liabilities by allowing you to keep them separate, states Small Business Trends. For example, if one of your clients decides to sue you for products or services pertaining to your business, they may have to file a lawsuit against your company, not you. Another example is if your business does not do as well as planned and there is a lot of debt, your creditors cannot sue to garnish your personal bank accounts for payment.
Keep in mind that LLCs are not for everyone. It is important for you to consider your business goals, develop a solid business plan and weigh the advantages and disadvantages carefully before choosing a structure for your company.