In an LLC business is done in the name of the company, not in the name of members individually. For small businesses which are owned by one person, the tax benefits of being a sole proprietorship outweigh the liability-reducing benefits of incorporation. By becoming a limited liability company, however, small businesses retain many of the perks of being unincorporated, while reducing their liability. The limitations of liability are, of course, very important and are the primary reason most small businesses choose to become an LLC.



Personal Liability

The essential advantage of a limited liability company is that it provides pass-through treatment without taxation at the entity level while at the same time shielding members from personal liability. The profits of the company are taxed personally at the individual level and not at the company level. Unless they personally guarantee them, the members are not liable for the contractual debts and obligations of the limited liability company.

Being a business owner, you are more likely to be sued then you would be otherwise, so you can use an LLC to shield your personal assets from a lawsuit against your company. Members of an LLC cannot be held personally liable for the debts of the company. So just like a corporation you as an owner can use an LLC as a form of protection for your personal assets. Anyone starting a new business must separate their personal assets and life from their business ventures. A limited liability company is personal protection in its purest form.

Conclusion

An LLC is a separate legal entity having the power to conduct business, acquire, hold and dispose of property, and sue or be sued in its own name. A limited liability company is superior to other business entities for tax reasons alone. In short, we can say that a limited liability company is simple to form and easy to run. What most people gain that form an LLC is flexibility. The protection you receive by setting up a limited liability company is worth the little paperwork and time involved to set it all up.

Financing Your New Business

Once you have set up your LLC, you will want to immediately begin building your business credit profile so that you can obtain credit under your new business name, get business lines of credit, and begin applying for business credit cards. Remember, for asset protection you must keep your business separate from your personal. That includes your business credit profile.

To learn how to get business credit, you can purchase the new e-Book by Susan Carter. This document contains step by step instructions on how to build your business profile so that you will have access to funds you can use for day to day operating expenses. You don't want to use your personal credit to finance your business because this exposures you and takes away the protection that is being offered by your LLC.

Take the time to educate yourself about business credit by purchasing ?Basics of Business Credit?. With your purchase you will get a Free Credit Restoration Guide that includes more than a dozen letters that can be used to send to credit bureaus, vendors, and other businesses that are reporting negative entries on your personal credit reports. This is a great package deal that is a ?must? for any new business owner. Go to http://www.SusanBooks.com to obtain your copy today.