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Home Q&A Forum What are the benefits of LLC formation?

Startup

LLC

Texas

Asked on Oct 26, 2023

What are the benefits of LLC formation?

I am a small business owner looking to expand my operations and protect my personal assets. I am considering forming a Limited Liability Company (LLC) and would like to understand the benefits of doing so. I understand that an LLC provides limited liability for its owners, but I am also interested in the tax implications and other benefits of LLC formation.

1 Attorney answer

Answer

Startup

Texas

Answered 256 days ago

Jimmy V.

ContractsCounsel verified

Business Lawyer
Licensed in Texas
Free Consultation

The LLC has three advantages over other types of business entities: (1) it creates a liability shield for the owner's personal assets in case the business gets sued; (2) the LLC has "pass-through" taxation - in other words, unlike a corporation, there is no tax due at the entity level. All profits and losses "pass through" to the owner and are accounted for on the owner's individual tax return; (3) the LLC is a simple and flexible business structure that does not require as much paperwork as a corporation.

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