The Benefits of the LLC Business Model


Many business owners are choosing to establish their company as a Limited Liability Corporation, or LLC. Do you know the benefits of choosing the LLC business model? Here are the four main advantages.

The first benefit is right in the name; Limited Liability Corporations have limited liability. This can be a major advantage if something were to go wrong. For example, if an LLC company is sued, the lawsuit is limited just to the company; the owner’s personal assets are safe.

Second, LLCs tend to involve less paperwork. There are minimal regulations governing the rules of operations and compliance over this business model. In fact, most LLCs are merely regulated by the rules of each state. Because of this, LLCs are easily the most flexible business models.

Just as LLCs have fewer regulations, they also have fewer formalities compared to many of the other business models. For example, there may not be strict rules about issuance of sock, holding frequent shareholder meetings, or keeping record minutes. That being said, it is still a good idea to establish a structure and document all changes and important notes even though it isn’t a requirement.

The last major benefit is in the taxes. An LLC is only required to file a business return if there is more than one owner, while all other business models must file a corporate tax return regardless of the amount of owners. For LLCs with just one owner, the business profits and losses can be filed along with the owner’s personal return.

While the type of business model that is best for your business ultimately depends on the type of business you’re running, if your business could function as an LLC, then it might be wise to use this model.  

If you have any further questions about the various types of business models, or the benefits of an LLC, don’t hesitate to contact us! Our attorneys here at KFB law will be happy to answer all of your business law questions.