Over 80 percent of new startups are funded by the owner. Coming up with the money to start a new business can be a bit difficult.
Once you have nestled away the cash you need to get your venture up and rolling, you will need to shift your focus to other pressing issues. Among the most important decisions you will make when first starting a business is choosing the right structure.
One of the most popular business structures in the United States is a limited liability company or LLC for short. There are a number of benefits that come with setting up a New York LLC and here are just some of them.
A Cost-Effective Way to Structure Your New Business
If you are like most entrepreneurs, finding a way to create a new company without spending a lot of money is a top priority. Luckily, creating an LLC in New York is relatively inexpensive. Filing for articles of organization will require you to either mail in, fax or fill out online forms with the state. If you decide to file by mail, you need to be aware that it will take about three to four weeks for a response.
Once you have filed your paperwork, you will need to publish your LLC in a New York newspaper. After the paper publishes this, they will generally send you proof of publication. Once you receive this, you will need to send this proof the New York Department of State along with a publication affidavit.
An LLC Will Help Keep Your Personal Assets Protected
When structuring your company as an LLC, you will be able to keep your personal assets protected. Most people fail to realize that nearly 75 percent of all startups will fail. If your venture does fail and you find yourself under a mountain of business debt, you want to ensure your personal possessions are safe.
By structuring your company as an LLC, you can keep creditors at bay in the event of a small business failure. If your business is ever sued, the LLC will protect you and other owners from being sued personally. Consulting with a business attorney is the best way to figure out whether or not an LLC is the right structure for you.
Avoid Paying More Taxes
One of the biggest problems a new business owner will have when neglecting to file as an LLC is pay double the taxes. By filing as an LLC, you will be able to separate yourself from the company when it comes to taxes. Under the LLC structure, your company will be taxed like a partnership or sole proprietorship.
This means that any profits the company makes are reported as your personal income. If you are confused when tax time arrives, working with a reputable accountant is probably a good idea.
LLCs Come With Fewer Restrictions
Business owners who are looking for a high degree of flexibility generally choose an LLC as their structure. An LLC structure will allow you to have as many owners as you want and more flexibility when it comes to profit sharing. You will also be able to easily transfer ownership with an LLC, which is great news for business owners trying to retire or pass their business on to a relative.
In order to find out more about the various business structures out there, you will need to talk with a knowledgeable business lawyer. They will be able to offer you a bit of guidance during this important decision-making process.