Limited Liability Company 101 for Business Beginners
Limited Liability Company or LLC is an entity legally created by the state for business structuring. Real state investments, vehicles, boats, and aircrafts are assets that LLC can hold it and run it like a business. Either it is owned by one or more individuals. Paying the filing fee and filing the corresponding LLC information documents to your state are the first steps. The main reason for creating an LLC is for asset protection. It is comparison to a wall between your personal assets and business assets. If you are sued by your creditors, only the assets of the LLC are attacked, not the personal assets you have. You have to consider that without LLC, your personal assets are going to be prey for by creditors. This is one of the benefits when forming a LLC, board of directors are not needed compared to corporations. It doesn’t need to hold board meetings or keep a record of it. Another benefit in LLC is no double taxation. And it can designate properties however the owner wants it. LLC is very suitable for all business owners, investors, even real estate owners. LLC requirements are based on the state you are in. There are states in this country that are very good for business as well as for LLC formation. So what are these states?
1.Wyoming. Forming an LLC in a favorable state means doing Wyoming because it is considered as the best state to form LLC. Wyoming has learned over the last 12 years that one of the ways to bring any business or any people to them is to create a favorable economic environment. The state developed the giving of tax incentives to those who are always regular with their taxes.
2.Nevada. Nevada is the best state to form LLC since it doesn’t even have a state tax. The LLC rules are designed to make sure that business owners would want to stay here for good. It allows the LLC to be there and not be penetrated and have the income inside of it insulated from outside attack. Nevada LLC will not be liable for any of your personal obligations.
3.Delaware. Delaware is an alternative in the corner of the best state to form LLC. The LLC rules in this state are favorable to real estate investors and entrepreneurs. It is insulated and contained; your risk is managed up to the point of what you want to put it at risk. And the rest of your assets are not affected. It’s going to encourage you to invest.
4.Texas. The last but not the least, Texas, another best state to form LLC. Texas has some of the highest exemptions from execution in the country. This state banked on these strategies to help them resolve supply and demand of businesses as well as proper asset protection.
To add, Kansas is also considered as the best state to form LLC.
LLC is designed to protect your assets, reduce the risk of mismanagement, and develop your success.