If you’re starting a business or are generally aware of business names, you’ve no doubt heard and seen the acronym LLC before. But what is it? And if you’re starting a business, is this particular entity option right for you?
To start, LLC stands for Limited Liability Company, and it is what it says it is, with some added advantages one doesn’t find with the many alternative business options.
An LLC offers the dual benefits of limited liability for its partners (called members) along with operational flexibility. The members are protected from their business creditors by the LLC merely existing.
This is important in a variety of ways and differs greatly from the corporation. The corporation is a stodgy relic for most small business owners. Unless you’re raising millions in startup capital out of the gate, there are few benefits to the corporate form. There are officer requirements. Meetings must be had. Minutes must be taken. If these formalities aren’t observed and recorded, and your business gets sued, guess what happens to your liability protections?
In that sense, most businesses benefit greatly from the LLC form. An added benefit is customization of the business’ operation, specialized roles of members, and a fully flexible slate for determining how, when, and under what conditions, members receive their distributions from the LLC’s income. A LLC shows other businesses and customers you are to be taken seriously.
If the corporation is a tuxedo, the LLC is business casual, and we live in a business casual world.
Forming an LLC is fast. We can get it done for you within a day. If you have any questions, please feel free to reach out!
