4 Reasons To Start An LLC

Limited Liability Company (LLC) benefits

If you have a business idea, then starting an LLC might be right for you. Even in the face of a continually transforming business landscape, LLCs remain one of the most popular options for entrepreneurs to begin trading with their product, service, or idea. Sometimes, the simplest option is the best and below, we detail some reasons why starting an LLC may be right for you.

What is an LLC?

The acronym LLC stands for “limited liability company,” and it’s a legal entity that can be established in order to run a business. The first LLC statute was created in 1977 to help streamline the formation of new businesses. (1)

An LLC is separate from the owners, though the profit and loss of an LLC go to the business’ owners who report them on their own tax returns. This is similar to how sole proprietorships and partnerships operate.

A key difference between LLCs and other business structures is that the owners are protected from legal and financial responsibility in the event of the business’s failure. This is despite the fact that, unlike a corporation which is owned by its shareholders, an LLC is owned by one or more individuals.

So, what are the benefits?

  1. Starting an LLC is easy

It’s an open secret that starting an LLC is straight-forward. Not being a corporation, it lacks much of the associated red tape and bureaucracy. A few things that you’re going to need include:

  • A name
  • A registered agent from your state who can accept legal papers on your behalf in the event of being sued
  • To comply with the tax regulations of the state in which you operate
  • To file annual reports

If you’d prefer to waive this process, there are alternative workarounds. You can hire a formation service, such as Zenbusiness, who may take the headache of starting your business off your hands.

  1. It’s never been more straight-forward to run an LLC

Maybe your LLC will sell products to your customers, or maybe you’ll be selling your expertise and services. Regardless of your business model, it has never been easier to conduct business in the increasingly digitised business space.

Fulfilment companies are becoming more popular to help assist with the day to day operations of your business. In general, when entrepreneurs have a business idea, their passion and determination is locked into delivering their vision to their clients, not the dreary admin, production, or customer service end of things.

Fulfilment companies can take all of these jobs off of your hands. They can work on production in a warehouse, they can package and deliver your goods, they can manage customer service, and even do your finances. If such services sound appealing to you, Inc and Go is a company who can steer you in the right direction.

  1. Taxation Breaks

LLCs have been popular for a long time, and one reason can be due to the attractive tax benefits that you can enjoy as an LLC. There are some major differences between corporations and LLCs that highlight why. (2)

LLCs have their profits “passed through” to their owners (often referred to as members). This means that the taxes are processed on an individual’s own tax return, making taxes considerably simpler. By contrast, corporations have to pay corporate tax and taxes on things like their dividends. Additionally, your personal assets are safe when operating with an LLC.

Corporations also pay a flat tax rate of 21% on all of their profits. LLCs, on the other hand, pay taxes proportionate to their earnings and total income for the year, meaning that this can often be less than the fixed rates for corporations. Tax can be a major headache for the uninitiated, so this guide can help business owners to get on the right track. (3)

  1. Identify emerging trends in a disrupted market

The global economy, and indeed your local economy, have all faced major disruptions due to the pandemic. While traditional industries have struggled to adapt to the accelerated digital shift, many forward thinking businesses are reshaping markets.

If you have an idea that takes advantage of the changing commercial landscape, an LLC may be the perfect way for you to formalise your idea into something profitable.


LLCs are a straight-forward way to start a business without being dissuaded by the high levels of risk that you would ordinarily face. Some benefits include the ease of establishing one, the relative simplicity in running it, tax incentives, and seizing opportunities in a disrupted market.

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