Posted on: 29 May 2020
It can be nerve-wracking to have a business, especially since there are a lot of moving parts to any organization. You may worry about things like taxes and legal liability, especially if you have a growing company. Here are three reasons you should use LLC formations services, and how this simple solution could protect you down the road.
1. Lower Your Tax Rate
LLC's are taxed differently than individual income, which is why many entrepreneurs, even those who don't have large companies, opt to create an LLC. Tax benefits improve if you have an LLC as an individual, rather than a corporation. For instance, if a corporation with an LLC makes $75,000 a year, 34% of that income is taxable. However, if an individual has an LLC and pulls in the same amount, only 25% of the income is taxable.
If you are paying more than 25% on the money you make for your individual business, consider forming an LLC. LLC's are quick and easy to create, giving you the chance to lower your tax rate without a lot of extra work.
2. Protect Yourself From Liability
One of the biggest reasons people set up LLCs is the fact that it provides some kind of protection if the company ever goes under. For instance, if you have a business and you don't have any type of entity set up, being sued, or losing a big account could put you out of business and incur debts. If you don't have an entity in place, you could be liable to pay those debts yourself or declare personal bankruptcy.
However, if you have an LLC, the business is responsible in the event that bankruptcy or lawsuit occurs. If the business ever goes under, you are not personally liable for the debts, the company is. While you may lose your company, you will not lose your personal money or property.
3. Set Up The Business Properly
Businesses can be complicated to set up, especially when it comes time to determine how the business will be taxed. By working with an LLC formations specialist, you can ensure that the company is set up properly, from the time it is first formed. You can ensure that everything is in place that needs to be in place, including articles of incorporation and other details.
If you are thinking about forming an organization and you aren't sure where to start, meet with an LLC formation solutions business to get started. In addition to talking with you about what kind of business you have and choosing the appropriate entity, LLC formation teams can help you with everything from knowing when to pay taxes and what you should expect to pay in terms of basic percentages based on previous income.Share