With so many informational resources available to entrepreneurs, it can be intimidating to find the right path for your business venture. Perhaps you have an idea and a prospective partner but are unsure where to even begin. Or, maybe you have assets and plans in place but have yet to start forming your business entity.
Whatever your situation, know that the best type of business structure for your interests will depend on a lot of factors. However, starting your company as an LLC may provide you and your business with significant benefits.
The matter of limited liability
One reason you may want to form an LLC is embedded right in the name of the formation itself – Limited Liability Company. When you form an LLC, your business affairs and assets become separate from your private ones. So, should your business assets become the target of litigation, you and your personal assets have protection. Of course, this protection is within reason. If you partake in illegal activities like fraud or embezzlement, that is a different story.
Convenient and efficient
Furthermore, forming an LLC often involves much less paperwork and therefore provides you with more time to focus on other matters as you establish the foundation for your company. Additionally, because your LLC will be a “pass-through entity,” filing tax returns will be quite simple. In other words, your business’s losses and profits going straight to you—the owner—may make for easier tax administration and filing.
There is no such thing as a perfect formation, though. Your business industry, assets, real estate and Texas state laws may all come into play as you make your decision.