| When creating an LLC as a single member LLC, | | | | same way as a sole proprietorship with a few |
| the business owners gains 4 significant | | | | exceptions. |
| advantages over a sole proprietor business | | | | When creating an LLC, the entity should have a |
| structure. With the costs of starting and | | | | simple operating agreement in place but |
| maintaining a limited liability company being so | | | | otherwise, there are no legally required formalities |
| minimal, most lawyers and CPAs would advise on | | | | like meetings and written approvals as there are |
| the use of the single member LLC. . . it is a | | | | with corporations. Maintenance is minimal. |
| protection vehicle and does not create any added | | | | When conducting business, it is very important to |
| complexity when it comes to operations and | | | | make clear to all parties that it is the LLC that is |
| taxes. | | | | the business. This usually means including your LLC |
| PROTECTION FOR THE MEMBER OF THE SINGLE | | | | business name in all your written material |
| MEMBER LLC | | | | (marketing material, advertisements, contracts). |
| A limited liability company provides a legally | | | | For a single member LLC, there is no difference in |
| enforceable shield protecting you personally from | | | | how the business reports and pays federal |
| the obligations and liabilities of your business. If | | | | income taxes . A single member LLC is |
| anyone ever wanted to file a lawsuit against your | | | | disregarded by the IRS for tax purposes only and |
| business, then you would not be personally liable | | | | so you pay taxes using the exact method of |
| just because you are the owner. If you run your | | | | rules for sole proprietorships. By operating a single |
| business as a sole proprietorship, you are | | | | member LLC, you get all the advantages of the |
| inextricably part of the business and so you | | | | limited liability company as a business vehicle |
| become the target of anyone who has a claim or | | | | without any added difficulties when it comes to |
| wants to make trouble for your business. You | | | | income taxes. |
| cannot avoid this personal liability in a sole | | | | PROFESSIONAL AND TRUSTWORTHY IMAGE |
| proprietorship. You need a single member LLC. | | | | Customers today are skeptical when it comes to |
| Do not think that given the nature of your | | | | choosing who to do business with. One method in |
| business, a lawsuit is unlikely. Business lawsuits are | | | | which they distinguish a legitimate businesses from |
| now an epidemic in America. The more your | | | | others is when they see that a business is being |
| business interacts with others, the more likely | | | | run through a formal legal entity such as an LLC. |
| there could be a claim. | | | | Let us face it. Most of the business scams and fly |
| So, any third party, whether it be a customer, a | | | | by night businesses out there are sole proprietors. |
| service provider, contractor, employee or anyone | | | | Their goals are to take money from unsuspecting |
| who just visits your business is a potential threat.. | | | | victims. Many will not go through the process of |
| Now, you can start to think through the chances | | | | setting up a formal legal entity for their scheming |
| of who can sue you but instead, try to | | | | plans. It is so simple to put forth a business name |
| understand what lawsuits are all about. They are | | | | to the public and allege that you are running a |
| about money. If your business becomes | | | | business. This is all that is required for a proprietor |
| successful, your chances of lawsuits are higher | | | | to start. |
| because you will be getting and keeping more | | | | Many customers recognize a business that has |
| assets. | | | | taken the steps involved with creating an LLC |
| Instead of justifying or hoping you never get | | | | likely has intelligent and serious owners behind it. A |
| sued as a sole proprietor, it is better to ask | | | | single member LLC business generally portrays |
| whether paying the few hundred dollars to create | | | | more trust and professionalism over a sole |
| and maintain an LLC each year is worth having | | | | proprietor running the same business. |
| this protection. Check with your specific state to | | | | Of course, there are many legitimate and |
| see what specific fees apply when it comes | | | | respectable sole proprietor businesses out there |
| creating an LLC and maintaining it on file each | | | | but for the potential customer it is difficult to |
| year. | | | | ascertain which ones are for real and are |
| NO ADDED COMPLEXITY WHEN IT COMES TO | | | | trustworthy. It helps a lot when customers see |
| OPERATIONS OR TAXES | | | | an LLC designation after a business name. |
| From an operational perspective, a single member | | | | Creating an LLC can makes it easier to launch |
| LLC can operate his or her business in almost the | | | | your business and get those customers. |
