You’ve decided to take that next step and follow your dream of running your own business. While this is a big decision, becoming your own boss and executing your vision is among the most fulfilling things you can do in this life.
Among the many choices you’ll make when legally establishing your business is what type it will be. Each type of business carries its own pros and cons, which makes certain kinds more ideal than others for business owners.
One of the most popular business types is a limited liability company or LLC. Why do people choose LLCs? A couple reasons include:
- Taxes: Choosing an LLC over a corporation is a great way for you to lower your tax obligation as a business owner. LLC owners pay in their taxes at 15.3 percent while the corporate tax rate is 21 percent. While there are benefits to a corporation, the tax savings that come with an LLC versus a corporation can be appealing.
- Separation of property: The reality is that some startups do file for bankruptcy, but LLC business owners keep their personal property like home or vehicle out of bankruptcy proceedings.
- Partnership: Navigating the business world alone as a first-time owner can be daunting and an LLC will allow you to both to enjoy the above benefits.
In short, the benefits of an LLC are in the name “limited liability” when it comes to both taxes and insulating yourself loss of property if your business files for bankruptcy.
There are still many steps to registering your LLC, even the name. Did you know that Massachusetts requires that some form of “LLC” appears in your name? There are many more steps you don’t want to overlook in the business formation process. Attention to detail can help ensure a smoother process to get your business off the ground.