The Llc Set-up: Setting Up A Limited Liability Company
Setting up a LLC or limited liability company is considered as one of the biggest decisions a company could make. This form of business registration has a lot of implications for the operation and management of the company and can ultimately contribute to its success or failure. But the first thing any business that wants to set up an LLC should do is to get good advice. Money and time is very essential in a company which is also needed in LLC registration and aside from the company will encounter advantages and disadvantages. It is useful to examine the options before investing either.
The simplest form of business registration is a sole proprietorship. This is usually a simple registration of the fact that an individual wishes to engage in public commerce and the nature of that business. Sole proprietorship business registration is mainly considered as one of the most direct form of business registration which includes minimal fee payments and obtaining business numbers which may permit the company to start the business. The individual owner can then start up operations and assume all of the liabilities and tax requirements of the business.
Incorporation is the more complicated form of business registration. Inclusion of business incorporation is registering a business as a corporation and issuing shares in that business to others who wants to be a part of the said business. The act of incorporation involves filing acts of incorporation with the state and while an individual can prepare and file these without an attorney, legal and financial advice is usually required to ensure that the documents are in order. There will have to be a Board of Directors, officers of the corporation and a method to inform shareholders of the on-going operations of the business.Anywhere in the two options given LLC is another option. LLC is much complicated than sole proprietorship and more basic than incorporation. It has some benefits and disadvantages. The disadvantages in LLC is that you will be going to spend additional time and money on this kind of registration. By the time LLC is approved, all disadvantages will be coming in.The major reason to set up an LLC is to protect the owner or owners of a business from liability.
This form of business registration limits the liabilities of the owners to the level of investment that they have made in the business. If the company will have debts and other damages engaged during the operation of the business, LLC will no longer be responsible for that. LLC's also gives some taxation benefits. No additional income tax is given to a limited liability company and they are only taxed once. Not like in company corporation that personal and corporate income are both taxed when dividends are distributed.
by: Asia Biz