Wondering if an LLC is the right structure for your business? Continue reading to learn more about how LLCs work.
What is an LLC?
In today's 'lawsuit-happy' environment, it's more important than ever to place a legal shield between you and your business. As a separate entity, LLCs do just that. There’s no personal liability for any LLC debts even if they relate to a contract or tort.
But, while legally separating businesses from the owner, it can elect treatment as a partnership for tax purposes. As such, the LLC doesn't pay any tax itself. Instead, the income passes through to the owners like with partnerships thanks to the tax rules governing partnerships that aren’t as rigid, allowing more flexibility in tax planning.
LLC’s are also easy to run and manage with no limitations as to how many members can be involved or where they’re located. Formed on the principle of the Freedom to Contract, owners need only agree among themselves on how to run the company, and courts will uphold that agreement. Even better, with an LLC, there’s no law requiring resolutions, amendments, meeting minutes or annual board meetings.
ADVANTAGES
- Asset Protection
- Tax Advantages
- Ability to Raise Capital
- Easy to Run
DISADVANTAGES
- Only Available to Privately Owned Companies
- Can Lose Pass-Through Tax Treatment
- Possible State Imposed Income Tax
Is an LLC the right structure for your new business?
Don't wait! Take advantage of the protections the law affords you and your business and form a Nevada LLC today. Still undecided? Let our Nevada business formation experts help you decide if a Nevada LLC is the right entity for you by calling 1-800-508-1729.
