Many believe LLC means "limited liability corporation." It doesn't. LLC stands for "limited liability company," and the difference matters. LLCs are a top choice for small businesses because they offer flexibility and protection. If you're forming a business, consider working with a College Station business attorney.
The Origins of LLCs
LLCs are a modern creation. They first appeared in the 1970s when Wyoming introduced this business structure. Before then, business owners had limited options, each with drawbacks. Corporations offered liability protection but came with double taxation. Partnerships and sole proprietorships provided no protection for personal assets.
LLCs solved both problems. They shield owners' personal assets from lawsuits while avoiding double taxation. With LLCs, profits pass directly to the owners, who pay taxes individually. This avoids the corporate issue of being taxed on both profits and dividends.
Benefits of LLCs
LLCs offer more than just tax advantages. Here are some key benefits:
1. Flexibility in Ownership
LLCs can have unlimited owners. S corporations, by contrast, limit ownership to 100 shareholders.
2. Ease of Creation
Starting an LLC is straightforward compared to other business structures. The process involves fewer formalities and less paperwork.
3. Professional Image
The "LLC" designation adds professionalism to a company's name. Many associate it with credibility, much like traditional corporations.
Considering an LLC? Here's What to Do
If you're thinking about forming an LLC, you have many options. However, setting up an LLC requires careful planning. A College Station business lawyer can help you structure your company and meet legal requirements.
Call Peterson Law Group at 979-703-7014 today. Our team will guide you through the process and ensure your LLC gets off to the right start.