Five Benefits Of Opening A Corporation or LLC
If you are in the process of starting a business, you want a legal entity to protect your assets while also retaining flexibility. A limited liability company (LLC) is an excellent option as they share the control benefits of a sole proprietorship or partnership as well as the tax benefits of a corporation.
As a new business owner or investor, it can be challenging to pick the right entity for your business. At Corey & Associates, we understand the advantages associated with selecting a corporation or LLC and want to guide you through the process. To reassure you, we have compiled a list of five benefits of opening a limited liability company.
1. Limited liability.
LLCs offer members of the company protection from liability. In other words, you are exempted from the debt obligations attributed to the company. Even if your company gets sued, your personal assets like a bank account, home, real estate will not be taken away. This will give you long-term security, and keep your business and personal financials separate.
2. Tax advantages.
If you choose to designate the company as a partnership or sole proprietorship, you can take advantage of the “pass-through” taxation. This means that income and profits will go directly to individual members without being taxed by the Government on a business level. Income will be reported as personal tax returns, and you can, therefore, avoid double taxation.
3. Heightened credibility.
When your business is registered with the state and bears ‘Corp’, ‘Inc.’, or ‘LLC’, it enhances your reputation. Suppliers, vendors, clients will perceive you as trustworthy and feel safer to do business with your company.
4. Unlimited life.
A corporation’s life is not dependent upon its owners. A corporation possesses the feature of unlimited life, meaning if an owner expires or wishes to sell their interest, the corporation will continue to exist and do business.
5. Transferability of ownership.
Owners of a limited liability company have the flexibility to create methods and conditions under which ownership may change. Ownership in a corporation is typically easily transferable but requires members to transfer some of their LLCs membership interests.
While an LLC may be the right choice for your business, you will need help setting up your accounting procedures and filing taxes. To ensure you follow current accounting practices and maintain long-term sustainability, reach out to Corey & Associates.
We are a professional accounting firm in Hialeah, FL with more than three decades of experience. From accounting, bookkeeping, taxation to business consulting, our accountants provide a wide range of services.
To learn more about our services, please click here. If you have any questions about opening a corporation or LLC or want to schedule an appointment with one of our accountants, get in touch with us by clicking here.