When starting a business, the first thing you need to do is decide what you want the structure to look like.
For many business owners, an LLC will prove beneficial. It has numerous plus points that make it popular with smaller businesses or first-time owners.
Nerd Wallet discusses the pros, cons and everything in between when it comes to LLCs. One of the biggest benefits: the flexibility.
In particular, while many LLCs default to allowing the business owners to manage the business, it also allows for the hiring of external or internal managers. This means owners can have as much or as little involvement as they want.
It also allows for switching between these methods, or mixing and matching, which allows for even more customization.
On top of that, the overall costs of starting an LLC are relatively low. Filing the initial paperwork does not cost much, and for many states, the yearly costs of upkeep and maintenance are also manageable.
However, keep in mind that these costs do differ pretty strikingly from state to state.
Finally and most importantly, the titular component of an LLC. Limited liability companies have the ability to let the owners divide their personal and business assets.
In short, if something goes wrong with the business and it ends up bankrupt, the owner can keep their personal finances, assets and items separate from this bankruptcy filing.
These are all strong benefits, making an LLC a good contender, especially for first-time or small business owners.