Not that long ago there were not that many options available to people who wanted to run their own business. There was a time when credit card processing for small business owners was not available. In addition, business owners could make their business a partnership, a sole proprietorship or a corporation. There was no middle ground. Although having a partnership or a sole proprietorship is normally the easiest route, some liability issues are involved. In addition, it is easier to apply for merchant accounts and has a few other benefits involved, it can become too confusing for a small business owner. Having a limited liability company is the perfect solution for those who are not interested in other business types.
LLC Explained
A limited liability company lets the small business owner protect his or her personal assets. This is especially helpful in the event that a contract or other business issue results in a lawsuit. However, liability insurance should still be purchased for the business. LLC owners can be more lenient about the liability insurance that is purchased. For example, insurance that protects personal assets and business assets is not required.
Limited Liability Companies Have Better Reputations
Although this is not always the case, your business has a better chance of drawing in more customers when it becomes a limited liability company. This is because limited liability companies are registered with the state and are normally more trustworthy. In addition, it will be easier for you to obtain merchant accounts if you have a limited liability company. Once you offer credit card processing to your customers it will be easier for them to make payments and it may convince them to keep coming back.
Limited Liability Companies and Paperwork
Having a sole proprietorship or a partnership does mean that there is not much paperwork that is associated with the business. However, a limited liability company does feature less paperwork than corporations do. This is especially the case when taxes are involved. Profits and losses of the business are added to the personal income taxes of LLC members. Less paperwork is required to set up the company as well.
Another great benefit is the fact that limited liability companies are not required to hold yearly meetings or filings. This means that more resources can be spent focusing on what is best for the business.