5 Reasons LLC is the Right Structure for Your Startup


LLC is the abbreviation of Limited Liability Company. By the term, we can say that the liability of the company will be limited to the earnings of the company. Hence, the owner’s assets will not be at stake to meet the liability of the debtors.

It makes this structure perfect for the startup firms. However, there are many benefits that a startup with LLC structure will enjoy. In this write-up, I will discuss them. So, let’s proceed:

  1. Right to Privacy

Limited liability companies need not publicly disclose the assets and the private affairs of the company. As a result, you can keep the business secrets intact which is vital for surviving in the intense market competition.

Also, you can avoid the pesky neighbors, needy family members, and the zealous creditors. Moreover, when you have privacy, you are less accountable to the people and regulators. So, you can carry out the business functions according to your game plan.

  1. Avoid Double Taxation

The LLCs get treatment as the sole proprietorship. Hence, you just give tax on the income of the company. There is no separate taxation for the owner and the company. So, you can save earnings and reinvest them for the growth of the company.

Therefore, you should start your startup as Limited Liability Company or LLC. It will ensure the higher growth of your business. However, you can convert it into a corporation any time you want through a simple process.

  1. Makes Rapid Changes

Unlike the C-Corp, the LLCs are not highly regulated. Hence, if you want to change any aspect of the business, you do not have to follow a long list of procedures. For example, you can easily add new partners or sell the interest in the entity to someone else.

Moreover, there is no need of any board meeting. Therefore, if you start your startup in this structure, you will get much flexibility in decision making. You will not have to think about complex laws and regulations.

  1. Protection of Personal Assets

If you start your startup based on LLC structure, you will be able to protect the personal assets against the lawsuits. On the other hand, each partner in a partnership business is individually liable for the liabilities of the company.

If the partners fail to repay the claims of the debtors through the income of the firm, each of the partners will be individually liable to repay the claims through their personal property. In this case, the LLC structure is safe. But the companies with LLC structure cannot enjoy the benefits of merger and acquisition.

  1. Easy Formation

Such company is very easy to form. You will not have to observe a lot of formalities. Moreover, you do not need to seek help from any attorney. You will just have to pay $100 for registration. Once you complete the registration process, you will get an Employer Identification Number (EIN). Also, you will be able to open bank accounts in the name of business.

In conclusions, I would suggest you get advice from any legal professional before deciding to pick up a business structure.


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