If you have a business, or are considering starting one, you need to think of the legal implications of doing so. When you are a small business owner, you are opening yourself up to certain liabilities that most likely did not exist before you were your own boss.
One other issue that you have to consider when you are an entrepreneur is taxes. Business taxes are handled much differently than personal taxes, so you have to be aware of what is going on with your business taxes. Consulting with an accountant is a great idea when it comes to business taxes.
If you are an entrepreneur, you can be a sole proprietor, though this generally is not the best choice for most people. When you are a sole proprietor, you are missing out on much of the business tax benefits and personal liability protection that you might otherwise enjoy. Of course, discussing what is best for your situation is best done with a professional.
What business structure should the average small business owner use? First off, the smart entrepreneur will seek professional guidance in determining which structure will offer them the best personal liability protection and allow them to take best advantage of tax laws.
Probably one of the best business structures to choose as an entrepreneur is a Limited Liability Company, or LLC. With a properly set up Limited Liability Company, you get personal liability protection because you are separating your business and personal activities. Also, when you choose to form an LLC, you get to choose how you are to be taxed, which can have some tremendous advantages.
Having an LLC set up is a very easy process. Generally, the more expensive option is paying a lawyer to set up your LLC. Or, you can use one of the less expensive online companies that offer LLC formation starting at under $200, which eliminates a lot of excuses as to why you don't have an LLC.
Of course there are other business structures that entrepreneurs can choose, but an LLC is one of the easiest to form and operate, so it works well for most small businesses. Because it is a nice balance of ease of use, simplicity in setting up, and offering personal liability protection, an LLC is a great choice for an entrepreneur.
Always talk with a professional to ensure LLC incorporation is the right structure for your small business. It is important to make sure that you have your business set up correctly to reduce personal liability and to take advantage of the tax benefits afforded to companies, and an LLC is a great way to accomplish this.
Caressa Waechter supports small business and truly feels most small businesses can benefit from LLC formation for their business. Find more about LLC formation by visiting her website.
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