Limited Liability Company: How Building an LLC Helps Your Business

Whether you’re establishing a fresh business or have been operating as a sole proprietor or simple proprietorship, you need to consider the benefits of building a private limited liability company to create a stable foundation for your business. In fact, LLC stands for legal liability company and it’s the preferred form of business organization for small companies. Not only does it protect the owners from business liabilities.

Following are several reasons why an LLC may be the best entity for your business:

Reduced Liability for Managers.

If you’re operating as the sole proprietorship or a simple partnership, in the eyes of the law, you and your business are legally the same people, meaning your business debts are considered to be your personal debts, putting your personal resources at risk. The LLC is legally separate from its managers and is responsible for its own debts and obligations, meaning personal assets like your bank and home account can’t be used to satisfy business debts.


Overnight and Less Paperwork Than a Company.

You could pick to incorporate your business rather than building an LLC, gaining the same limited liability but running a corporation is more intricate. For example, corporations often have to keep detailed records of business transactions and operations. They’re also required to hold annual shareholder meetings, make annual reports, and settle annual charges to the state. LLCs aren’t required to file annual reports, keep detailed records, and hold meetings.

Tax Benefits of an LLC.

There are many advantages of an LLC versus a corporation. For one, the IRS spontaneously classifies an LLC as either a sole proprietorship or a partnership for tax purposes, meaning that LLCs can enjoy “pass-through” taxation where the managers pay taxes via their personal tax returns. You can also opt to be taxed as an S-Corporation or a C-Corporation, giving you choices for your mode of taxation.

Flexible Ownership.

If compared to an S-Corporation whose ownership is restricted for tax purposes, LLCs enjoy pass-through taxation without restrictions on the number or form of owners.

Flexible Management.

Corporations are required to have the board of directors to oversee company principles and officers to run the business on a daily basis. A corporation’s owners, called shareholders, must meet annually to elect directors and conduct company business. LLCs aren’t required to abide by this formal structure and the managers have few restrictions on business operations and decision-making.

Flexible Profit Distribution.

LLCs aren’t required to distribute profits equally or by percentage to managers. By contrast, corporations have to allocate to shareholders based on the forms and number of shares they hold.

Form an LLC in NY State.

If you want to take advantage of all the benefits an LLC has to offer but don’t know where to start, look no further than Windsor. Windsor offers convenient LLC formation packages that take the guesswork out of building your business entity. You can do it all online and their friendly staff is here to support you through the entire procedure.

These are the major steps you have to take when establishing an LLC for your business. But, bear in mind that the process has some critical drawbacks. Contact Windsor Corporate and they’ll handle everything! Visit for more info!

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