Advantages of an LLC?
The advantages of an LLC include liability protection for owners, flexible organizational structure, limited reporting requirements, and potential tax benefits.
Generally, LLC owner’s personal assets are protected against any liability incurred during the course of doing business. The LLC can have one or more managing members and offers very flexible management structure. Reporting requirements are less complicated than with a corporation. In addition, owners may elect to be taxed as a pass-through entity or like a corporation.
LLCs offer flexibility in the way they are managed and usually have fewer recordkeeping and reporting obligations than corporations. LLC business owners have the option of taxing the LLC like a sole proprietorship, a partnership or a corporation by filing the appropriate forms with the IRS. Generally, the LLC’s business income is treated like personal income because the IRS automatically classifies the LLC as either a sole proprietorship or a partnership depending on how many members are involved. The organizational structure of an LLC is more streamlined and informal than that of a corporation, however, an LLC is required to have at least one registered manager (or Managing Member).