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3 Reasons to Start an LLC Online

2 June 2018 No Comment

When you open your own business, it’s important to establish a legal entity that is separate from you as an individual. This provides protection for your personal assets, tax advantages, and other benefits. Many small businesses opt to create a limited liability company, or LLC. Here are three key reasons why the LLC is such a popular business entity.

Asset Protection

If you have not established a separate business entity, you are personally responsible for business debts and lawsuits. Creating an LLC provides limited liability, which means your personal assets cannot be seized to satisfy legal judgements or creditors. Once you form an LLC, you can apply for an EIN online. This federal tax ID number allows you to establish separate financial accounts for your business, an important aspect of maintaining limited liability.

Pass-Through Taxation

LLCs are not required to pay federal income tax. Instead, business income and losses “pass through” to the individual tax returns of the owners. This is an advantage over corporations, which are taxed on income both at the corporate level when it is received and on the individual level when it is distributed to shareholders. In addition to the tax benefits of an LLC, it’s also usually less expensive to form an LLC than to form other entities.

Operational Flexibility

Not only can you easily form an LLC online, you are also subject to fewer legal requirements than are required for other business entities such as corporations. You can establish a flexible management structure and do not need to appoint a board of directors, hold official meetings, or submit meeting minutes. An LLC can have any number of owners, and the owners can be either individuals or other businesses.

If you’re wondering how to get an LLC, visit Gov Doc Filing to get the forms you need to get started. We provide the resources that will help your small business succeed.

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