How Do You Understand The Advantages Of A Limited Liability Company?
The main advantages of a limited liability company-as opposed to a sole proprietorship or partnership-are those implied in the title itself: In case of litigation and ensuing debt, the pursuer can only go after company assets, not the owner’s personal assets. Each member of a limited liability company, or LLC, is not personally liable. To understand all of the advantages of an LLC, though, consider the tax advantages along with the reduced liability. Ask your lawyer to help you decide the level of liability you stand to have as a company. If your line of work or level of exposure to the public is such that you are at risk of litigation, the advantages of limited liability probably make sense. Consider your company’s profit potential in the first 5 years of business. If your pre-formation profits are booming, chances are you will be keep profits within the company rather than include them all on your own tax return. If this is the case, you might consider becoming an LLC so that you can
