Establishing
a Limited Liability Corporation
What is a Limited Liability
Corporation? by BJ Norman
A Limited Liability Corporation, also know as a LLC,
and/or a limited liability company, has become a very popular choice
of business structures. Limited Liability Corporations are similar
to basic corporation, but have a different tax structure and is
mostly considered because as a limited liability corporation it
provides you the owner with a person shield of protection, keeping
your personal assets safe from lawsuits.
If you are just starting your business, you may be
wondering what type of business structure is best suited for you
business. The two most important reasons most business owners
consider incorporating is to protect themselves from personal
liability and to have more control over there money before taxes.
Another important reason you may consider a limited liability
company is that it allows your business to form
business credit options
outside of your personal credit.
See Step by Step to Establishing your own Limited Liability Company
Although it is said that up to 90% of
all business will fail in the first two year, I personally disagree
with those numbers, as it is almost impossible to determine if a
business closed due to money matters, or name change, or business
structure change and many other reason. So, determining what
business structure you choose should not only be based on
anticipated thoughts that you business might close. Instead
we should focus more on the benefits that a business structure
offers.
Business Structures
There are three different business structures we will learn about
and each offers different benefits to the business owner. The
following will talk about the three business structures.
Corporations
There are two types of Corporations we will talk about. The first
type of Corporation is cal the “C” Corporation and this type of
business structure basically allows you to be taxed on your revenue
and you are then also taxed on any money that you remove from the
corporation. The second type of Corporation is the “S” Corporations,
which passes the taxes to all the shareholders of the business, and
you report information on you personal tax forms.
Here both types of Corporations are
classified as a independent entity or structure from a legal aspect.
Therefore, the corporations assets is separate from the personal
shareholders assets, creating a shield of protection. Therefore, if
the business fails your personal assets are safe.
Business Partnerships
A business partnership structure is
when two people join and go into business together. In this type of
structure the partners of the business contribute to the
administration of the business according to there agreement. This
type of business structure can be very dangerous because it does not
provide any type of protection in the event that the business goes
belly up. This type of structure makes you responsible for any type
of disaster your partner may have created. One partner may created a
mess and both partners are deemed liable in a court of law, due the
the partnership.
Limited Liability Corporation LLC
We have previously stated that this type of business structure make
the business an independent entity. Business can be conducting using
your LLC status as owner. A limited liability corporation offers you
the opportunity to establish business credit in the name of the
Limited Liability Corporation (LLC). As well, there are various tax
breaks under this type of business structure.
It is very important that you
research all the different options offered, and do your homework
before deciding on which business entity is best for you. If you’d
like to know more about the different tax options offer, you should
be sure to contact someone certified in that particular area.
Written by B.J. Norman, administrator
of New Works’s work at home jobs and advice at: http://www.newwork-at-home.com This article can be used in it’s
entirety as long as all bylines are in place.
