Starting a business in Pennsylvania involves choosing the best business structure for your situation. The Small Business Administration (SBA) says that a limited liability company (LLC) is often a good choice for business owners with personal assets to protect. All business structures have advantages, but you might want to take a closer look at those offered by an LLC.
Less expensive and easier to form than most other business structures
Staying in compliance with business law is important when forming a business. You need to do everything correctly or risk making serious legal mistakes.
Some business structures, such as corporations, are often complex. You might find it complicated or even confusing to get a corporation going. However, an LLC is one of the least expensive and easiest business structures you can choose.
The steps to forming an LLC depend on your state. However, the cost and paperwork are usually minimal no matter where you live. The process is often as simple as filing an Articles of Organization, formation document and operating agreement.
Protect your assets
Your assets and your business assets remain separate when you form an LLC. That means your assets are safe if your business gets sued or owes money. However, there are two exceptions to this rule.
You might decide to sign a personal guarantee to get financing for your business. If you do sign, that means you’re personally responsible for that particular business debt. You can also find yourself personally responsible if your business is involved in a lawsuit that involves negligence or fraud.
An LLC is often seen as more credible than a sole proprietorship. When your clients or investors see that you’ve formed an LLC, they might take you more seriously. Forbes Advisor reports that choosing an LLC for your business structure also makes it easier to eventually expand the business.
The points mentioned above are only a few of many benefits associated with an LLC. No matter the benefits, an LLC may or may not serve your business goals. You’ll likely want to research several business structures before deciding if an LLC is best for you.