What You Should Know Before You LLC, Essay Example

Levine (2010) penned an opinion piece discussing how much prestige and power a business structure  retains if it has a Limited Liability Company (LLC) in its suffix. She argues that this perspective is a natural component of what businesses can really do, and that the prestige it brings enhances the brand of a business manifold. It is not difficult for businesses to obtain an LLC, as the paperwork is quite straightforward and simple. Depending on the state, there is a small filing fee that hovers around two hundred dollars. Many small business owners do not know how to effectively incorporate an LLC into their business. Customers often invest in small businesses that have an LLC attached to it because customers believe that those with LLC are more established and have longevity. The same is true for investors who usually only invest in businesses in which business and personal assets remain separate as they do not want to relinquish purchase shares and capital to a corporation. In addition, a corporate mandate protects a small business’ personal assets because it separates an owner’s personal identity from their business, so creditors are unable to lay claims to an owner’s cars, savings, or homes. The owner is merely liable for how their employees behave, so LLC members have the safety of their personal assets being safeguarded from pernicious actions taken against them. Finally, a small business with an LLC enjoys tax benefits as opposed to corporations that have their taxes doubled. It is clear that the LLC carries with it a variety of advantages, which is why small businesses should always incorporate in order for a business to have perpetual existence even if management/ownership changes.

References

Levine, S. (2010). What you should know before you LLC. Business Insider. Retrieved October 12, 2015 from