Pros and Cons of LLCs November 27, 2020 | Business Litigation
When you are preparing to start your own business, one of the most important decisions you will make is the type of business structure you select. For most people, this means becoming an LLC, or Limited Liability Company. Considered to be a simple and inexpensive way to structure your business, it is vital you know all that goes along with an LLC prior to signing on the dotted line. Since any LLC will have pros and cons associated with it, always meet with a Palm Harbor business attorney at The Law Office of Robert Eckard & Associates to learn all you need to know about an LLC.
Limiting Your Liability
Perhaps more than anything, the biggest pro of an LLC is limiting your liability as a business owner. For example, if a customer was injured at your business or by a product they purchased from your company, the LLC structure would shield your personal assets should a lawsuit be filed against you. Along with this, the LLC will shield you against unpaid business debts as well as billing disputes with your vendors. To ensure your LLC is set up correctly to offer you these protections, rely on experienced Palm Harbor business attorneys.
No Restrictions on Number of Partners
If you are wanting to start a business that will involve partners, choosing an LLC will be your best bet. In structuring your business as an LLC, you will enjoy the benefit of having no restrictions on the number of partners you can have with your business. Since you will want to know much more about this prior to finalize any paperwork, consult with a Palm harbor business lawyer.
Licensing and Filing Fees
As one of the cons of an LLC, you will be required to pay various licensing and filing fees when starting your business. For example, when you file a new LLC within a state, you will usually need to pay anywhere from $50 to as much as $500. In addition, annual filing fees will be required to keep your LLC status current, with some fees running as high as $820. Due to the importance of paying these fees so that your LLC is considered current as well as legal, seek out business attorneys in Palm Harbor FL who handle these matters on a regular basis.
Self-Employment and Excise Taxes
Like most things in life, you will be required to pay various types of taxes associated with your business. In the case of an LLC, this means paying self-employment and excise taxes. If you are required to pay self-employment taxes on your LLC, this will be paid on the profits of your business, with the tax rate being possibly as high as 7.5 percent. Also, if you create an LLC in a state where you neither live nor do business, you could be taxed on your income by that state as well. Since the last thing you will need as a business owner is tax problems, consult with Palm harbor business lawyers who can explain these details to you in easy-to-understand terms.
Due to the many decisions that come with choosing whether or not an LLC is the best structure for your particular business, don’t leave anything to chance and find yourself facing many unexpected and unpleasant surprises at tax time or other times during the year. Instead, schedule a consultation today with business lawyers in Palm Harbor FL at The Law Office of Robert Eckard & Associates. Once you do, you can learn about these and many other pros and cons associated with an LLC, allowing you to make an informed decision that will give you peace of mind.