Limited liability corporations, or LLCs, offer numerous advantages over many other forms of incorporated businesses, but it must be said that they are not for every intrepid entrepreneur. Read on and discover just a few advantages that LLCs might offer you.
Sharing Profit Flexibility
When a LLC is incorporated, the members must agree to an operating agreement – the conditions of which, of course, can change over time if the members do agree. In the outline of this operating agreement, you and the other members of the LLC will specifically outline how profits will be divided and shared. There are various ways in which profits can be shared by the members, so long as the terms are all agreed upon and signed. For example, it could be the case that one member of the LLC will decide to take a smaller percentage than another member in favor of the other member spending more physical labor and man hours operating the day-to-day concerns of the business.
You Can Feel Free to Run Your Own Corporation
In almost every state, law mandates that there need be only one member of the corporation. That means you can run your own business and not have to worry about any of the concerns that often fall on the shoulders of other incorporated businesses, such as paying out proportional dividends as is required by normal corporations, even if one member of the corporation is doing work that is proportionally greater than another member. Essentially, you operate much like you would had you achieved the status of a sole proprietor, but without many of the liability issues that revolve around being a sole proprietor.
While establishing the groundwork for an LLC, there is little in the way of paperwork that you have to worry about. Essentially, you simply have to file the articles of organization and submit these articles to the secretary of state, along with a nominal fee. This paperwork does not usually require the rigorous help of a business lawyer, though if you feel uncomfortable completing the paperwork, feel free to hire one. It usually involves naming the business, the LLC members, its physical location, and the planned duration of the business.
If you are considering starting an LLC, it is probably in your best interest to consult and perhaps hire a local and trusted attorney from a law firm like Souders Law Group who specializes in business law, just in order to ensure that your legal ducks are in order before launching your LLC.