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Reasons Why You Should Register Your Business as an LLC

Many business owners prefer registering their companies as either sole proprietorships, corporations or partnerships. There is another interesting form of business. The limited Liability Company is an often-neglected business structure. Most business owners settle for other forms of business such as partnerships when the most ideal structure for them would be a limited liability company. The key features of a partnership and a corporation are integrated in an LLC. This allows you to get the advantages of the two forms of business. This means you will enjoy the benefits of the two business structures. The key advantages of an LLC are discussed below.

The limited liability that an LLC offers is its main highlight. All business owners within an LLC are referred to as members. The liability protection that LLC offers is in a way that each member is able to operate as a separate entity. If the company has any debts, members are not help responsible at a personal level unless they made personal agreements to that. A good instance would be if the company runs bankrupt no member shall be held responsible by clients or suppliers on a personal level. Even if the member can settle the debts personally, they are not legally obliged to do so.

The tax models available with this business structure are very attractive. Unlike all other corporations, the LLC is not exclusively liable to corporate tax. This is usually possible because of the pass capability that LLCs have. Members are entitled to the profits as well as the losses of the company but they are obligated to post this figures in their respective tax returns. The members have freedom in the tax plan they choose to adopt. LLC members can also decide to opt for corporate tax if they feel it would be ideal.

LLCs have freedom of distribution company profits and the losses as well in any way possible. This is different from a partnership where the distribution of profits and losses is done based on the percentage of ownership or investment. With an LLC, members agree on whatever formula they choose to split the profits or losses. This business form also has few requirements for startup. The LLC company structure can be adopted by an individual entrepreneur as well as a group of businessmen since there are many different types of LLCs you can form depending on the number of participants.

Another great advantage of the LLC is the unlimited number of members that can form a single Limited Liability Company. The tax options available are suitable for any business owner. With the different tax climates, an LLC will offer you range of choice on how to file your return the best way.

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