Why An LLC

Edgar Sierra
Updated On
Aug 25, 2022
Published On
Jul 25, 2022

What is an LLC?

An LLC, or limited liability company, is a U.S. business entity that protects the business entity and the owner(s). 


Theories of an LLC

Answer to theories

The simple answer to these theories: Wrong!

When creating an LLC, you complete one of the most critical assets to your business: protection. When you create an LLC, your business becomes separate from personal assets, known as limited liability protection. Limited liability protection means that all personal assets are separated from business assets. For example, if you own a car or a house, you would be protected from the business and vice versa. Even if you don't currently own a home or a car, you will be covered in the future.

The cost of an LLC

These costs will vary from state to state. Check your Secretary of State's website for any cost associated with creating an LLC. Most states will charge a setup fee for the first year and then a fixed cost every year after that. 

Additional benefits

Forming your LLC allows you to use a name other than your own. This will enable you to name your business whatever you want, as long as it's not already taken. For example, you wouldn't have to call it John Doe, LLC, just because it's your name. You would be able to name it Jane Dough ,LLC but you, John Doe, are the legal owner. This will lead to you being able to brand your logo and business however you want without using your name. 


Final thoughts

The average cost of an LLC is much cheaper than the possibility of losing your business and personal assets if you were ever put in a challenging situation. Don't wait until you make $100k a year, don't wait until you are "successful," and don't expect any business paperwork to be cheap. You and your business should be protected no matter where in your entrepreneurial journey you are.

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