For indiviudals starting a small business, it is important that they understand the necessity of protecting their personal assets in the event the business has problems in the future. For most small businesses a limited liability company (LLC)is the easist and cheapest way to keep their personal assets seperate from those of the company. This article explains the basics of registering and setting up a limited liability company.
Starting a business can be very stressful. You have to carefully organize
the ideas for the business in a plan that can be followed. You also have to
find the money to start the business. That alone can be a very stressful task.
And, of course, you have to let people know that your new business exists at
all.
Aside from all of this, there is one more thing that is very important to do
when starting a business. You need to make your business separate from yourself
so that your personal assets are protected. As exciting as starting a business
can be, you must plan ahead and have a way to protect yourself in case your
business is sued or experiences other legal problems.
The way to do this is by creating a separate legal entity for your business.
If you are starting out small and perhaps are only going to have one
employee—yourself—then the easy way to do this is by forming a limited
liability company.
The purpose of this article is to explain the characteristics of a limited
liability company, and why this type of business entity is conducive for many
small businesses. It will also give details on establishing a limited liability
company, as well as give some examples of the paperwork that will be necessary
to establish your new company.
Before we present the information, it is important to understand what is
being presented. The information is this article should only be used to give
you a better understanding of one of many options that are available. Only have
consulting with a lawyer or other licensed professional should you make
important decisions about protecting your personal assets and the assets of
your business.
What is an LLC?
A limited liability company (LLC) is a legal business structure that
separates a business and its assets from those of the owner or owners of the
company. Within the past 10 to 15 years, the LLC has become a very popular
business entity. The LLC is relatively easy to establish—especially compared to
other legal entities for businesses. In addition, the LLC is easy to maintain
with a minimum of paperwork for the owner.
The LLC is now recognized in all fifty states. In addition, unlike other
types of legal structures, an LLC can have only one owner. So, if you are
starting a small business where you are going to be the owner and the only
employee, you can still create an LLC for your situation.