Are you a California entrepreneur? You have many options available when deciding what you want your future business model to be. Each one comes with its own benefits and potential disadvantages. Today we will look at limited liability corporations, also called LLCs. We will take a careful look at all the upsides it may offer you compared to other types of business structures.
How an LLC can benefit you
Entrepreneur looks at the different advantages an LLC can offer you. First, you have limited liability. As the name suggests, this is one of the biggest draws of an LLC. In many other business models, you share liability with your company. If something tanks your company, your personal finances will also fall to risk. With an LLC, your business could suffer loss and your personal assets will remain safe.
LLCs and small, loose-form businesses
LLCs are often smaller than corporations or bigger forms of business. You gain advantages from that as well. For example, LLCs deal with much less paperwork. Corporations hold annual shareholder meetings. They must also pay annual state fees and make yearly reports. LLCs do not have to deal with these things. They do not even have to file extensive records. LLCs are good if you plan on having a business that is more informal and freeform.
There is a lot of flexibility in LLCs because of that, too. For example, LLCs have pass-through taxation without ownership restrictions. Compare that to S corporations, which cannot have over 100 shareholders. LLCs also do not have formal structures for management. This allows LLCs to maintain thorough flexibility from the top down.