An LLC, or limited liability company, is a type of business that offers limited protection through taxation. Just like other business structures in Pennsylvania, an LLC is a separate entity from the business owners. This way, the owners themselves are not held personally liable for the debts accrued over the course of the business. Read more to learn about the advantages that come with starting an LLC.
Limited personal liability
Limited liability companies are shielded from any personal liability based on things that the business itself performs. This ensures that creditors cannot go after you for personal assets such as your house or savings based on the liabilities that your business accrues. This is better than sole proprietors, which can have their assets garnished to pay for debts accrued over the course of business.
Flexible membership agreements
According to business law, LLC members may include partnerships, individuals, trusts, etc., and there is no legal limit to the number of members you can add to an LLC. Compare this to the S Corporations, or corporations that are taxed under Subchapter S of the Internal Revenue Code, which are strictly limited in the number of shareholders that can join. In many cases, this is a tangible benefit to be gained.
You can choose between management or managing the LLC yourself
When you opt for an LLC, you have more than one management operation. Other business structures, such as corporations, need to be managed by a board of directors. This simplifies the business.
Increased credibility for your business
Customers are sometimes hesitant to trust contractors. One of the major benefits of creating an LLC is that customers are given a better first impression of your business. This is because LLCs help businesses build credibility.
LLCs come with several major benefits, but depending on the type of business you want to run, you should consider as many business structures as are currently available, including S-Corporations and others. In general, there are more benefits that come with starting an LLC than not, so an attorney may help you decide if this is the right option for you.