Should I Form an LLC?
When starting a business, the first question you might ask yourself (or your attorney) is, “should I form an LLC?” In most cases, the answer is going to be “yes!”
So why is it typically a good idea to form an LLC? The biggest reason is because of the liability protection that an LLC gives to its members. The liabilities of the LLC will be separate from the individual liability of its members. In other words, the members are not personally liable for the liabilities of the LLC.
If your business is in an industry that has a high likelihood of litigation (think construction, for example), or if you have a store front which increases the chances of slip-and-fall and similar liabilities, forming an LLC is a must. But even for home-based or virtual businesses, or industries that have a low likelihood of lawsuits, the pros of forming an LLC will typically outweigh the cons. It is becoming increasingly common for businesses to get sued by customers, suppliers, and other businesses. Forming your business as an LLC is one of the best ways to protect your own personal assets as well as those of your business.
Forming an LLC can also have some tax benefits. As an LLC, the business can elect to be taxed as an S Corporation. This can potentially save you a great deal of money in taxes.
In Colorado, and in many other states, forming an LLC is relatively painless and inexpensive. Spending a bit of money in the beginning to form an LLC is typically a very wise investment.
If you are ready to form an LLC, or if you want to figure out if an LLC is right for your business, I can help! Fees start at just $500 to form an LLC in Colorado. Contact me or schedule a consultation now to take the first step in protecting yourself and your business.