There are actually many benefits of trading as a limited company, but also at the same time, there are also certain disadvantages. Before learning them, know first that there are differences between a LLC, a corporation, and a partnership.
This is mainly because LLC's has limitations on their liabilities, or fewer actually. Although it operates like a combination of partnership and corporation, they tend to have lower pass-through taxes which are really good for new businesses.
From this advantage alone, owners and their stockholders now have fewer liabilities to worry about like debts and lawsuits. You must know that LLC's also has the same power and some capabilities like a company. Also remember that when the period of duration for the LLC expires, it can be dissolved if the court ordered to.
This is one of its disadvantage though, for it can really complicate things when the LLC is dissolved. Most importantly, it can give you a hard time at transferring ownership, and it also depends on the state or country your business is in. Which is also why investors refrain from LLC's because of this problem.
The good thing is all of these can be easily dealt with, so long as you are following the rules of the law. Another advantage to point out is that because you have minimal liabilities to attend to, you can assure your suppliers and customers with your services.
Always remember that any business, no matter how strong it is or profitable, it always has risks. Being a LLC can make you more confident and secured since you have lower taxes, lower liabilities to endure. But keep in mind though, that this may not work for every business. It's rather more suitable for small businesses.
This is mainly because LLC's has limitations on their liabilities, or fewer actually. Although it operates like a combination of partnership and corporation, they tend to have lower pass-through taxes which are really good for new businesses.
From this advantage alone, owners and their stockholders now have fewer liabilities to worry about like debts and lawsuits. You must know that LLC's also has the same power and some capabilities like a company. Also remember that when the period of duration for the LLC expires, it can be dissolved if the court ordered to.
This is one of its disadvantage though, for it can really complicate things when the LLC is dissolved. Most importantly, it can give you a hard time at transferring ownership, and it also depends on the state or country your business is in. Which is also why investors refrain from LLC's because of this problem.
The good thing is all of these can be easily dealt with, so long as you are following the rules of the law. Another advantage to point out is that because you have minimal liabilities to attend to, you can assure your suppliers and customers with your services.
Always remember that any business, no matter how strong it is or profitable, it always has risks. Being a LLC can make you more confident and secured since you have lower taxes, lower liabilities to endure. But keep in mind though, that this may not work for every business. It's rather more suitable for small businesses.
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