You do not have to have a master’s degree in business to know about the popularity of an LLC as a business entity type. If you know someone who has a small business, there is a good chance that the business is an LLC. You might even consider starting an LLC yourself if you want to go into business. People who are averse to paperwork and to paying lots of taxes find the LLC entity type especially appealing.
What is so Great About an LLC?
LLC stands for limited liability company. All businesses involve some amount of risk, meaning that you might lose money by operating the business. When you choose an LLC, the company can only lose its money, not yours. Plenty of people have gone broke when their business ventures failed. Their businesses were not LLCs. The LLC entity designation prevents you from personal financial losses if your business fails. Likewise, if someone sues your LLC, the court cannot make you use your personal assets to pay what the court orders you to pay the plaintiff. Business closures and corporate lawsuits are very common. It makes sense for cautious entrepreneurs to choose the LLC entity designation.
Getting Started with Your LLC
You must get a federal Tax ID number to make your LLC official. You can apply online for this number, which is officially called an EIN. It is like getting a social security number for your business. The form is very short, and you will receive an email with your EIN the same day. Once you get it, you can open a bank account for your LLC.
An LLC offers you great protection from financial loss. It is the practical choice when you are starting a small business.