Updated: May 17, 2022
With many people considering the current economic climate to be excellent, there are numerous new companies springing up all over Arizona. A new business venture offers the opportunity to grow and develop a new source of income, but many new business owners are uncertain about how to legally structure their new endeavors. No matter the industry in which you are engaged, one of the business models to which you should give serious consideration is a Limited Liability Corporation (LLC), which offers some distinct business advantages.
Avoid Double Taxation
Based on how a company is structured as well as how many employees or investors it has, LLC structures have the potential to help avoid double taxation and if necessary, can even support multiple stock classes. This exists in comparison to C-Corp structures, which result in both the business and owner being taxed separately. Many businesses find this tax advantage helpful as they growing in size rapidly.
The LLC’s Location can be Selected
It is common knowledge that many companies are incorporated in Delaware because the costs are low and laws are advantageous to business. Some companies, however, decide to locate their LLC in other states due to distinct tax advantages. Sometimes, companies discover that it actually costs more trying to avoid certain state taxes than it does to pay the costs directly.
It is Easy to Make Changes with an LLC
After establishing an LLC, many business owners find that they are easy to manage. Not only is little ongoing maintenance required, but it is also easy to add new partners and sell interests. This ease is a substantial advantage when compared to C-Corp business structures, which require board decisions before changes are made.
Easier to Protect Assets
Many companies select LLC structures because they help to protect personal assets against lawsuits that might be directed against the company. Other types of business models, including sole proprietorship and general partnership, frequently leave business owners much more personally exposed to the threat of lawsuits.
Easier to Register
Many business owners discover that it is easier and quicker to register LLCs than other types of business models. It is relatively easy to register the business and obtain an Employer ID number.
Speak with an Experienced Business Law Attorney Today
No matter how you are considering structuring your new business, it is a wise idea to speak with an experienced attorney who can help make sure that the process proceeds smoothly and that you select the business model that best matches your goals. At Monahan Law, our Glendale Business Law Team helped numerous people with starting a variety of business ventures and understand what it takes to create an LLC as well as other types of business models. Contact our law office today to schedule an initial free case evaluation.