Within the United States, a limited liability company is a type of business entity that allows the pass-through of the taxation policies of sole entrepreneurship or partnership with the limited liability of a corporation. This creates the best of both worlds scenario for the business owners. They have slowly started to become a favorite for new and small businesses thanks to their more flexible and more straightforward policies. During the formation of an LLC, your business will become a legal entity on its own. It will have separate legal matters and debts. However, it is essential to know that they are still tied to your personal taxes.
What kind of businesses choose LLC
An LLC is a good option when you do not plan on garnering any investment for your business. If you feel that you might need asset protection and flexible management of business and taxes, then LLC is the choice for you. An LLC is a great choice for businesses that are small in size. Whether you are a sole proprietor, a partnership, or a small scale corporation with multiple members, LLC will bring you several advantages. It comes with the same limited liability protection as a corporation without the complexities and formalities.
LLCs are perfect for those opening up a real estate, fitness training, or financial advising business. It is perfect for those who wish to try the solo move. However, If you are opening up a financial institution like a bank, insurance agency, or a financial trust company, then an LLC request cannot be filed. Sometimes the LLC will be limited for certain industries within the home state.
So what really is the benefit and why do people like Joseph Maenza opt for it:
When you are sole proprietor or partnership, your debts are the business’s debts and vice versa. If you, your partner, or your employee is accused of some negligence, your personal assets will be at risk. However, with LLC, personal liability will be limited. This is because the LLC and its owners are separate entities. The LLCs will have their own debts and obligation, you can lose the money that you invested within the company, your personal assets like bank account and home cannot be pawned to pay off business debts. This also means that if an employee messes up you will not be made to pay with your personal finances.
A lot of corporations also offer limited liability and so have to observe some requirements that might not be suitable for a small business. Doing things like holding the annual shareholder meeting, making annual reports, and paying annual state fees is not something a small business will be viable to do so. An LLC will not be required to fulfill such formalities.
This is also why the renowned attorney, Joseph Maenza opted for an LLC with his Maenza Enterprises LLC. Having specialized in finance, print media, fashion, and television for two decades and representing high profile celebrities like JOJO and Mary J Blige, Maenza noticed the traction that was picking up. He is now running a successful limited liability company in Miami Beach, Florida.