Entrepreneurship is one of the cornerstones of the “American dream” as thousands of people make the decision every year to be their own boss and strike out on their own. While many entrepreneurs make the decision to create their business as a sole proprietorship, doing so can open them up to several different types of issues in the future. There are several benefits to forming your Texas business as an LLC. Being informed of those benefits is an important part of protecting yourself and your new business.
Protect yourself against legal issues
When you form your business as an LLC, the business becomes its own separate legal entity. That means any sort of legal action that comes against the business does not directly impact you. Yes, you will have to deal with the stress of your business being involved in litigation, but your personal assets will be completely protected against the claim that is filed against your business.
Choose your tax structure
If you choose sole proprietorship as your business model, you will be taxed on everything; every dollar that you make from your new business will be subject to state and federal taxation. There are several different types of tax structures that are available to LLCs, each of which has its own list of benefits. Since you get to choose your LLC’s tax status, you and your business law attorney can decide which structure works best for you.
Less paperwork and fewer administrative requirements
Forming an LLC requires you to file the necessary paperwork and pay any associated fees required by your state to the State Attorney General. The information required on this paperwork is generally very basic and can be filled out in a matter of minutes. Conversely, other business models require much more upfront money and a significant amount of paperwork to become a legally operating entity.
Forming a business, regardless of the structure you choose, is a legal process that should always involve the assistance of an attorney. This attorney may not only ensure that all of your paperwork is filled out correctly but also help you with any legal issues that arise after your business is in operation.
