Forming an LLC? Learn More About the Primary Benefits
Are you planning to form a limited liability company (LLC)? If you’re looking for help forming an LLC, then you want to work with a business lawyer that has extensive experience in this area of the law.
It’s particularly important to have help forming a corporation in order to ensure that all state and federal requirements are met. Furthermore, a business attorney will be able to provide counsel and assist you and the other members through the process.
According to the U.S. Small Business Administration (SBA), there are three primary benefits, or advantages, to forming an LLC. These include limited liability, more efficient record-keeping, and profit sharing. When you have limited liability, it basically means that unless you or your employees engage in “wrongful acts,” you would not be held personally liable for any business decisions or actions in which you engage.
The SBA indicates that “operational ease” predominates when forming an LLC. Basically, this means that your initial costs would be less than when forming other types of corporations. Furthermore, there is less paperwork required to register an LLC, which is an added convenience.
When it comes to profit sharing, the members of an LLC have the freedom to distribute profits as they choose. The SBA draws a comparison between “capital and sweat equity,” and indicates that profits and/or losses can be distributed according to the members’ determinations.
When you seek legal services to form an LLC, you will probably have a number of specific questions. One of these may pertain to what occurs when a member dies. Since an LLC is considered to be property, if you or any of the other members don’t have wills, your attorney will likely advise you to create one.
It’s interesting to note that many people haven’t created the time to make a will. Recent figures show that approximately 64% of people in the United States don’t have this important document. For the 55 to 64 age group, 51% haven’t drawn up a will.
Once you and the other members meet with a business attorney to form an LLC, they will be able to respond to these and other potential questions. While it depends on the level of your assets, you may also want to discuss creating a trust with your attorney.