Whether starting a business or reorganizing an existing business, there is much to consider about this decision. Using the proper formation for a business can make all the difference and give your business a competitive edge in the beginning. Since over half of all new businesses fail, one could use any advantage they can take ahold of. One advantage for a new business could be an LLC business formation.
First of all, for those that are new to the process, every business must pick a business formation to organize themselves under. Each business formation has pluses and downsides, many of which are applicable to different industries and business focuses. One such business formation, the LLC or limited liability corporation, is a relatively new business formation type that has been popular for business due to its benefits. In the past, companies may have organized under an S-corp or small corporation, but this doesn’t necessarily offer as many tax benefits or legal protections.
A big benefit of an LLC is the ability to protect private assets in situations in which the company would be sued. Other business formation options do not allow for this benefit. Another potential benefit for an LLC is when that business is engaged in a dangerous activity that makes it more likely to be sued or has the potential of racking up large amounts of debt. Both things are easy to do in times of business lows, as many businesses may see over the course of their growth.
In short, an LLC may be a wonderful business formation option for those in East Baton Rouge Parish looking to start a new business. It’s also possible to reorganize an existing business under an LLC — especially if it was originally incorporated in a time before LLC’s existed. At the end of the day, pick the business formation that benefits your business the most.
Source: FindLaw, “Limited Liability Corporation,” accessed on Oct. 30, 2017