News on U.S. government agencies, U.S. politics, companies doing business with U.S. federal government. Read U.S. national and local news. This site is not affiliated with United States Government.
(EMAILWIRE.COM, July 14, 2010 ) Richmond, Virginia - The limited liability company (LLC) has only been in existence for less than 50 years, but, in its short life, it has quickly become the preferred legal entity of choice for business owners.
The LLC originated from the specific need to provide more flexibility for small business operations. Over time, the LLC laws have been amended and updated to cater to the fluid needs of entrepreneurship and the self employed.
As each state eliminated the need for an LLC to have more than one member, the single member LLC, in particular, has established itself itself as an ideal vehicle for the sole proprietor. Not only are LLCs being formed for new businesses but existing sole proprietors are transferring their businesses into single member LLC legal entities because the protection is so important.
“ A solo owner can run a business with the same simplicity and flexibility as a sole proprietor structure but in addition obtain the protection of vicarious personal liability protection from business obligations and liability. This is the same protection afforded by the stalwart corporation but without the added governance complexity and additional formalities required by corporations” states Amyli McDaniel, founder of http://www.TheLLCExpert.com, a popular online portal focused on the limited liability company.
Is personal liability protection so important? If you look at the number of limited liability companies formed each year, you can find the answer. Over one million new LLC entities are formed each year. Plus, lawsuits are on the rise and small business lawsuits have become an epidemic. Unprotected and unsuspecting business owners find themselves dragged into expensive legal disputes where their personal assets are at risk.
The LLC is another form of insurance and because it is so simple to maintain, the solo consultant or entrepreneur does not have to worry about added legal obligations.
For minimal costs and a small amount of paperwork obligations, business owners can protect themselves from losing their homes and other personal assets from business related obligations. IN addition, a single member LLC offers the benefits of a more credible and trustworthy image, enhanced ability to raise capital and more tax flexibility than a sole proprietorship.
Another rising trend is that many corporate businesses refuse to hire independent contractors and suppliers unless the services are offered through legal entities such as an LLC. This is because contracting with an LLC versus an individual lowers their risk when it comes to employment taxes and general liability. As a result, thousands of self employed consultants and professionals are forming single member LLC entities.
When a limited liability company is owned by just one member, the governance procedures can be more simple and straightforward than a multi-member LLC. However, there is more of a risk that the owner can lose personal liability protection when there is only one member.
Ms. McDaniel adds “Maintaining and, even more importantly, documenting, independence and separation between an LLC and a single owner is essential.”
The LLC Expert, LLC operates www.TheLLCExpert.com and offers single member specific forms and education to help the solo owner properly maintain and preserve protection.
We are pleased to offer you this exciting, new, and entirely free professional resource. Visit our Free Industry resource center today to browse our selection of 600+ complimentary Industry magazines, white papers, webinars, podcasts, and more. Get popular titles including:
