You are starting a small business. Congratulations! That brave step is the first of many. You are in a class above the rest because of that step and join many souls that take risks and adventure seriously. You know you don’t know everything. That’s the second step, so congratulations on your progress. The next step is not to learn everything, because that would take away all of the fun you’re going to have. No, the next step is to learn everything that you possibly can. Read books. If you don’t care for reading, take a class or a seminar. Even reading this blog is part of step 3. Look at you!
In that great search for knowledge, I will help explain what an LLC can help you do for your small business. An LLC is a Limited Liability Company. This means you combine the limited owner liability of a corporation with the tax ease of and help of a partnership. If you own an LLC, you are a Member. That sounds fun, huh? A Member can be an individual or company, depending on who are what owns the small business.
Now that you know what an LLC is, aren’t you wondering how you will get taxed as a Member? Of course you are. Simply enough, your business would not be taxed. You and each Member will get taxed based on incomes individually. Although this seems easy enough, there are many annual forms that need to be filled out correctly. That’s another lesson for you, Mr. or Ms. Small Business Owner; you have to get your paperwork in!
Another benefit is that you do not have personal liability for a debt. Pretty sweet, huh? Also, as an LLC, you will not have to have shareholder meetings, but will have to keep records for annual state reports. You don’t have to have an operating agreement, so your operation is like a partnership, without federal regulations.
Not everything is an advantage with high taxes and fees in some states and lack of group medical insurance. But there are some things that help, like multiple owners and ability to split loss or profit with the business. If you want to start your business as an LLC, get your paperwork done and keep your inspiration! What you’re going to do is not easy, but after all of the steps you’ve taken in the few minutes to read this shows you’ve got the nerve. Now, all you have to do is keep it. Bonne chance, my friend and remember step number 3. You can never stop learning how to improve your small business and fulfill your dreams!