My answer to Should I form an LLC “just in case?”
Answer by Raad Ahmed:
Forming a limited liability company (LLC) can be very valuable for a company. Here’s a few reasons why:
- Easy and cheap to set up, as well as maintain
- Not taxed as an entity [aka not subject to double taxation]
- Protects your personal liability
The best part about an LLC is you’re not subject to all the regulatory stuff like disclosures, costly accounting and yet you still get the personal liability protection. Therefore, it’s ideal for small businesses with a few people. The “just in case” comes in because it truly it smart to protect your personal assets. For example, with a sole proprietorship, if you end up injuring a customer or fail to pay your suppliers, your personal banking account can be at risk.
Hope that helps clear up some stuff. Starting a business on the side is a very exciting time period and I think you’ll enjoy the flexibility that an LLC will offer you. If you’re looking for a quick and cost-effective way to set up your LLC, feel free to check out.