An LLC, or Limited Liability Company, is emerging as an alternative way of doing things for people who want to set up in business and avoid some of the legal and fiscal hassles inherent in the other ways of doing it. It has become more popular in recent years due to the protection is gives to partners in the business and to the business itself. If this is something that interests you, then it is worth reading the following tips on successfully and effectively using the terms of an LLC to get your own business off the ground.
1) The internet is an indispensable tool in commencing trading as an LLC, as in so many other situations. The resources available for potential LLCs online range from sites to help you find out if the company name you want is still available, and online forms which can simplify the process of creating a business immeasurably. It will also help to clarify your rights as an LLC.
2) It is not enough to know that an LLC offers you legal and fiscal protections which work to your advantage. While this is indeed the case, the protections you are offered are not all-encompassing, and setting up an LLC does not make you completely bullet-proof. Be aware of the limitations of the process, because as useful as it is, its use will become extremely limited if you exceed the allowances that it bestows upon you.
3) The fees for filing paperwork to aid the creation of an LLC vary considerably from state to state. For individuals looking to go into business partnerships, being aware of the fees where you are and elsewhere is hugely beneficial. It could be that the different members of the partnership live in different states, or live close to a state border. In such a case, filing in the “cheapest” state could be a smart bit of business early on – when it is most vital to save money.
4) Paying for some form of legal advice before you set up as an LLC may seem like an extraneous expense, particularly if you feel that you are quite savvy when it comes to legal matters. However, nobody knows the law like a lawyer does, and taking some form of advice – although possibly not cheap – will pay for itself in the long run. Avoiding the pitfalls is not cheating, it is protecting yourself from future difficulty, and potentially increasing your profit margin.
5) Make sure that it is worth setting up as an LLC. In many cases, particularly if your business is essentially just you, going to the bother of filing paperwork and meeting the requirements of an LLC can actually be a lot more hard work and expense than it is worth. As a partnership, there are plenty of reasons why you should consider operating as an LLC – but if you simply have to meet all the same costs in a different way, as opposed to sharing and lightening the burden, it is less cut and dried.
Disclaimer: This article is for informational and entertainment purposes only, and should not be construed as legal advice on any subject matter.