One of the most important aspects of starting a business is choosing the entity that offers the most benefit to your business. Limited liability companies are considered the most commonly preferred business establishments in various fields. Limited liability is known to your legally recognized perpetual business entity. LLC incorporation is easy, simple, and fast. LLC combines the flexibility of a partnership with the liability protection that corporations enjoy. There are many advantages to forming an LLC over a corporation
One of the greatest benefits of forming an LLC is that you have the option of choosing how you are taxed. The LLC tax rate is completely dependent on the owner’s income. Under the corporate treatment option, if you have higher income, you will get lower tax rates.
Protection of personal property
By forming an LLC, you can protect your personal assets from those of your business, if any lawsuits are filed against your business. Therefore, LLC protects your asset
No double taxation
Corporations are subject to double taxation, where the corporation pays the taxes at the corporate level first and then on the income that is distributed as dividends. LLCs are not subject to double taxation like corporations. Business income is reported on your personal income tax return and is eliminated once. You can approach a business tax preparation company near you to learn the procedure for filing the return.
Low audit risk
Sole proprietorship faces a higher IRS audit risk than LLC. If you have struggled to form an LLC, then you are in business where there is less IRS audit risk.
If you are running an LLC, then you have a wide variety of options on how to run the business. You can easily add members to your business without too much paperwork like in corporations. A Limited Liability Company is a flexible business structure that gives you a variety of options for managing your business.
Leasing of assets
If you are running an LLC, you can lease your personal assets to the company. This means that you can run your LLC from your home office and show that the LLC rents the office to you. By doing so, you can write off business expenses and improve your financial situation. To do this, you need a formal lease.
Incorporating an LLC as a business structure is the best option for an average entrepreneur. If you are going to run an LLC business, contact the nearest Small Business Tax Services Company to run your business effectively.