When creating a business, the first step is to decide what structure you want your business to fall under.
LLCs, or limited liability companies, exist as one of the most popular structures for businesses. But what are the main benefits?
Limited liability
Nerd Wallet discusses the benefits of limited liability companies. The first is titular: limited liability. But what exactly does this mean?
Essentially, limited liability keeps your personal and business assets separate. This means that in the event of a failed business or bankruptcy situation, you do not have to worry about your personal property or assets getting seized in response.
Some exceptions exist, however, such as if you do not keep a distinct line between your personal and business assets.
Flexibility
Management is particularly flexible, too. In most states, the default for an LLC is that the owners all have a say in daily management of the business.
However, it is also possible to hire a manager internally or externally who can handle the daily operations and running of the business, too. It is even possible to switch between these two options if any major changes occur that would render one more useful than the other.
Easy upkeep
Finally, the basic costs and paperwork for starting an LLC will often come in at a much smaller amount than other types of business structures. This means the hurdle for starting is lower and more manageable for new businesses.
Just keep in mind that the fees for running an LLC can differ wildly from state to state, and in some states, this cost is somewhat prohibitive.