09 Oct How Would I Benefit From An LLC? Jacob Wooley, Partner
Do you operate a traditional business, have a rental house and own a personal car? Do you have multiple pieces of land or a home? What about other personal property that you value? If the answer is yes to any of these questions, then forming a Limited Liability Company (LLC) might be a good option for you and your business. LLCs will shield your personal assets from liability concerns that result from your business activity. An LLC will protect your family’s assets from being seized to pay off debts accrued by your business. This means that if the LLC was to go bankrupt or default on loans creditors could not go after personal accounts and property to satisfy debts.
You might ask, “How is an LLC taxed?” LLCs are taxed differently from corporations. Corporations are taxed twice. The first tax is levied on the corporation itself and the next tax occurs when corporate owners receive payments from the corporation. LLCs are considered a pass-through entity; meaning that the LLC does not pay taxes itself, but instead, the profits and losses are passed through to the owners and are taxed at the owner’s personal rate.
If you form an LLC, the decision-making process and ability to manage your business’s assets is not altered. LLCs are easy to manage and do not require the strict structure and procedures like corporations. LLC owners have the authority to continue making every-day decisions without encountering any unnecessary burdens. By separating your business and personal assets, you can protect your personal accounts from creditors and lawsuits that may be levied against your business and your business’ assets.
LLCs are easy to set up and have filing fees of $300 in the State of Texas. Limited Partnerships have filing fees of $750. You can achieve personal protections from both, but protection from an LLC comes at a much cheaper cost.
If you want more information on how to protect your personal assets, ensure business continuity in your estate plan, avoid paying extra taxes and how to create business entities that can be easily managed, contact our office or create an appointment online.