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We have added this page after receiving contractor requests. Contractors are always looking for the most cost effective way to manage their business and so we wanted to share some of the resources and tools that we have either used or has been recommended to us. If you have a recommendation that you would like to share with other contractors, please let us know. You can use the contact us form or send us an email.

Advantages of forming an LLC

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Advantages of forming an LLC

The popularity of Limited Liability Companies (LLCs) has soared over the past 10 years, and for good reasons. LLCs combine the pass-through taxation benefits of a sole proprietorship with the limited liability protection of a corporation.

Whether you are just starting your business or you have already been operating a business as a sole proprietorship or general partnership, you may be wondering about the benefits of forming your business as a Limited Liability Company (LLC). Often business owners think that forming a business as an LLC is too costly or too time-consuming, and neither is the case.

The benefits the owners' gain by forming their business as an LLC typically outweigh any perceived disadvantages. These benefits are, in many cases, unavailable to sole proprietorships and general partnerships.
The Advantages of LLC Formation Include:

Limited Liability - LLCs provide limited liability protection to their owners (who are called members). Typically, the owners are not personally responsible for the debts and liabilities of the business; thus, creditors cannot pursue owners' personal assets, such as a house or car, to pay business debts. Conversely, in a sole proprietorship or general partnership, owners and the business are legally considered the same and personal assets can be used to pay business debts.

Pass-through Taxation - LLCs typically do not pay taxes at the business level. Any business income or loss is "passed-through" to the owners and reported on the owners' personal income tax returns. Any tax due is then paid at the individual level.

Establishing Credibility - Forming an LLC may help a new business establish credibility with potential customers, employees, vendors and partners.

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