5 Reasons That Make Texas LLCs a Smart Choice

More and more people nowadays are opting to convert their businesses to a Limited Liability Company (LLC). No surprise there. It’s a perfectly rational choice considering the flexibility and security that an LLC adds to a business. Contractors and customers alike consider LLCs to be far more credible than traditional companies running under a sole proprietorship or partnership.

Here’s 5 reasons why both business owners and their clients love a Limited Liability Company:

#1 – Liability Protection

The first and foremost reason to incorporate your business into an LLC is liability protection. Running a business can be a crazy adventure; it’s exciting, but at the same time it’s also risky. You shouldn’t dive into it without a safety net … because anything is possible.

Liability protection is essential.

When you form an LLC, your business becomes a separate legal entity under its own name. You’ll no longer be personally liable for any losses incurred by your business, hence no matter what happens your personal assets will be safe.

You can pursue your dream freely without the constant fear of losing your family’s savings.

#2 – Tax Savings

None of us are really enthusiastic about giving away our hard earned cash in the form of taxes. And of course we all love tax deductions. Like all businesses, LLCs can write off their business expenses from their total income and thus report a lower net profit to the IRS, thereby reducing their taxes.

The good news is that LLCs can choose how they want to be taxed. They may be taxed as corporations, sole proprietorships, or even partnerships.

By default an LLC is taxed as a sole proprietorship or a partnership. All its profits and losses pass through to the owners. The LLC does not pay any income taxes. This protects LLCs from the double taxation system imposed on C-corporations; this can save you thousands of dollars!

In other words, an LLC protects you against both liability and double taxation. Awesome right?

#3 – Perpetual Existence

Let’s be real, none of us are going to live forever. An unincorporated company dies with its owner. If you want to leave a legacy that lives beyond your time then you need to incorporate your business.

By registering your company as an LLC, you make it immortal. In other words, even if the owner of an LLC dies, the company lives on.

#4 – Credibility

Having an LLC added to your business name can boost your credibility significantly. It sends a positive signal that attracts vendors, customers and partners alike. A lot of new doors will open for you once your company becomes a Limited Liability Company.

#5 – Minimal Formalities

While corporations and LLCs have a lot in common, the two points that differentiate them are the taxation system and the level of formalities.

Corporations have a lot of black and white rules, LLCs are designed to be relatively less formal than Corporations. They’ve got a lot more flexibility and hence they’re easier to manage.

Looking to learn more about the benefits of having an LLC? Do you think an LLC is the best choice for your business?


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