If you have an idea for a small business, you may wonder whether it is worth it to form an LLC or if you should just make it a sole proprietorship. First, let’s address what an LLC is. It stands for Limited Liability Company. It is a legal structure that allows you to be a member rather than an owner, and as such, it separates your personal accounts from your business. Here are a couple of advantages of this type of business formation:
- Tax benefits – Revenue of the business is filtered through company accounts and to the members. This simplifies your personal taxes and may even put you in a lower tax bracket depending on how much money you dispense to yourself and what stays with the company. The business, on the other hand, pays taxes based on whether it experiences a profit or loss.
- Protects your personal assets – You can protect your home, car, and personal accounts from the LLC’s creditors should the business fall on difficult times. Hence, the “limited liability” portion of LLC.
Forming an LLC in California
Since every state has slightly different regulations, you want a small business attorney who is familiar with your needs here in California. Pokala Law APC in San Diego offers affordable business attorney services to small business owners in southern California. If you are ready to get your new business started, don’t do it alone. Call Pokala Law APC at 1-844-695-1487. You can also request a consultation via our website.