I won’t go into much detail on business structure as I could for the moment, because if I did, we’d be here for hours. Business law is laden with so much nuance and intricacy that it would take a fine-tooth comb to get through all the hairs and pull out all the dandruff one by one. It’s a painstaking process, one you could at least minimize the heartache and turmoil by hiring an attorney to consult you on whether or not a partnership, or a corporation — or especially in this case, an LLC — would be the best fit for you and your company.
Wait a Second — What’s an LLC?
A limited liability company? That hopefully didn’t fly way past your head (because at one point, it did for me) like an unlucky bullet over Jack Bauer’s skull. A lot of business owners and entrepreneurs go for a limited liability company for obvious reasons, but this is probably the most important one (and most likely the only reason you need to know): there’s flexibility in this structure of the LLC.
Like a corporation, though, you file certain articles of organization and structure as well as a certificate of formation with a limited liability company. However, the flexibility comes around when you can incorporate more of a balance between ‘owner’ and ’employee’. You’re basically all members of the company, for lack of a better term, and all members have the option to decide how they want to be taxed within the entity — either as a ‘partnership’ or ‘corporation’. There’s where you get the flexibility and additional benefits with a limited liability company.
In a way, you’re looking at a hybrid of a corporation and partnership: that’s what a limited liability company really is. And it just might be a good fit for you.
So Should You File for One?
It’s a possibility, for sure. It all depends on what your goals are. There are trade-offs involved. If you’re a small business, but have a decent size workforce, chances are an LLC might be the way to go. You won’t pay as many taxes — but you get a lot of the corporate benefits from the government you otherwise wouldn’t get from a business partnership or sole proprietorship.
It’s all up to you on the path you want to take. As always, though, consultation’s your best weapon in the effort to formulate a business, hence why you could easily contact an organization like Cloud Based Bookkeeping and get it all squared away. That way, you can do away with that fine-tooth comb!