Single Member Limited Liability Company – is this the right entity for my business?Whitney Irish
Posting By Glenn Frank
So you are thinking of starting a business or already have a business and are wondering what this “Single Member Limited Liability Company” (SMLLC) is all about? All your friends talk about it and now you are wanting to know if this is the right business structure for you! The primary reason people form these entities is for asset protection. The entity may well protect your non-business assets (like your home) if something were to go wrong. Here are some things you should consider:
Why Form an SMLLC
- Affordable and easy to form.
- An LLC with a single owner will have few if any separate income tax filings.
- Single member LLCs will be managed 100% by the owner.
- The usual processing time to create an LLC for all documents is between seven and eight weeks.
- Require separation of accounting.
- Similar to corporations, but requiring less formal activities and have more flexibility. | Whereas corporations have specific roles (like directors, managers, and employees), LLC’s generally do not. | Whereas corporations have seals, minutes and formal meeting requirements, LLC’s generally do not.
- Liability protection. | LLC’s, if operated as separate from you personally, protect the other assets of the owner from being attacked if something were to go wrong within the LLC. This does not necessarily relieve the need for other proper liability insurance within the entity. | Extremely flexible and can grow in complexity as the business develops.
Forming an entity and which entity to form can be complex and confusing. As always you should consult with your tax advisor to make sure your exact facts make the SMLLC the entity for you. If you have any questions about this or any other tax matter please do not hesitate to contact us!