Are you thinking of starting a new business in Massachusetts? There are plenty of ways that you can choose to incorporate your business. One of the most common methods is to form a Limited Liability Corporation, also known as an LLC. There are several pros and cons to this approach that are well worth learning about.
What are the most notable pros?
When it comes to business formation, an LLC can be a great option. The filing process is very quick and simple. You can include as many partners and owners as you want. Cash distribution is, likewise, a simple affair. You can make a series of draws from your company account. This saves you from having to pay yourself a salary.
Taxation is also a fairly straightforward and simple affair. The structure for paying taxes becomes easier when you become a business owner. As the founder of an LLC, you will be entitled to take advantage of pass-through taxation. This will tend to keep your taxes easier to manage and, potentially, much lower.
You should also note that filing as an official type of corporation will give you a much higher level of credibility. This will help you when you begin to establish your public brand. The final pro to consider is that an LLC entitles you to the protection of your personal assets in case the business should fail.
Are there any serious cons to consider?
There are many factors to consider when you are starting an LLC. Chief among them is that it comes with a host of maintenance and annual fees. If you can manage to quickly post a profit, these fees should not be much of an issue.
Changing the membership of your company will indeed be harder if you go the LLC route. This is because it requires a great deal of legal paperwork to register the turnover. LLCs are also much harder for outsiders to invest in. These are all potential cons you should consider before you make your final choice.
