When forming a business, there is more than one way to do it. More precisely, businesses can be structured in one of several ways: a sole proprietorship, a full C-corporation, or an LLC. Many business owners choose the LLC route.

What Is an LLC?

An LLC, short for limited liability corporation, is a business entity type that shields business owners from being personally liable for the company’s liabilities, including its debts. An LLC is a hybrid type of entity that combines the benefits of business partnerships and sole proprietorship combined into one legal structure.

Benefits of Forming an LLC

When you start an LLC, you will accrue numerous benefits for your business. These include:

  • Tax Benefits. Under an LLC, business profits pass through to the owner and are not double-taxed as they are in a C-corporation.
  • Personal Asset Protection. Your personal wealth will not be affected should the business run into trouble.
  • Increased Access to Financing. More lenders will likely be interested in offering financial help to your business after it becomes an LLC.
  • Simplicity and Flexibility. LLCs are easy to set up and are versatile as a business entity.  

How To Start an LLC

Generally, you’ll need to follow these steps to set up an LLC:

  • Determine which state with which you will file the LLC.
  • Give the LLC a name.
  • Find a registered agent, as required by most states.
  • File with your selected state.
  • Form a management hierarchy and an operating agreement.
  • If you plan on hiring employees, obtain an employee identification number (EIN). 
  • If planning on operating in multiple states, file to do business in them.  
  • Seek Professional Help for Your Business

No business owner can do everything alone. Everyone needs expertise, often in the form of financial advice and help. Give the Hemingway Financial Group a call. They can assist you in reaching your business objectives when you start an LLC.