There are many reasons why proprietors of companies consider changing their ownership model to an LLC. To analyze whether this is right for your business or organization, we should first attempt to understand what an LLC is. If you choose to make this transition, it is a detailed process and is best done with professional assistance from the experts. Various packages and simplified breakdown of procedures are listed at which makes the entire task hassle-free and simple.

What is an LLC?

To put it in very simple terms, an LLC or limited liability company is an organizational structure, where the individual members of the company are not liable for the company’s liabilities. This means that the structure is such that, unlike in a sole proprietorship, the business structure protects the owners of the company from debts related to the company’s operations.

This type of a business combines pass-through taxation for a partnership with limited liability. The result is that the business owners have more flexibility and may choose corporate tax rules over partnership.

Being a hybrid entity that isn’t confined to the rules affecting either corporations or sole proprietorships, it is a good idea for companies with a single owner for more flexibility. This is because LLC’s have fewer regulations to stick to in comparison with traditional corporations. This gives members a more flexible management structure.

Where income tax regulations are concerned, for an LLC with a single owner, the individual will have to report the LLC’s income details on his or her individual tax return. With multiple partners, income and loss is reported on IRS form 1065. The fact to note here is that unlike in the case of corporations, here the taxation is done only once and not twice. In other corporate structures, the income is taxed twice at both the corporate entity level and when it is distributed to the shareholders. This means the tax amount is essentially smaller.

Main benefits of changing to an LLC

Whether your organization has a single owner or is managed by multiple partners. There are several reasons to consider changing it to an LLC. The main thing is that business owners in this case will enjoy protection from both current and future liabilities on a personal level. This allows limited personal liability exposure.

The flexibility with regard to tax benefits is another major advantage to consider. LLC form offers tax benefits and allow owners to choose between taxation as a partnership or as a corporate entity. It also drastically reduces the paperwork for administrative purposes, easing the overall administrative costs when compared to corporations.

Transitioning from your current structure to an LLC isn’t easy without the proper assistance. The information on will enable you to get a quick idea of the different benefits of opting for professional help from experts in this field. Once you decide to become an LLC, you will have to file Articles of Organization with the state and work your way through the complicated payment processes that are relevant to your case. The easiest way is to hire an expert for the task, while you devote your attention to growing your business.