Chances are, you have heard the acronym: LLC. Maybe you even know that it stands for Limited Liability Company. But what exactly is an LLC? And why is it such a popular way to classify your business?
When you are looking to open your own business, you have a lot of choices of which way to go. You can open a DBA, and LLC, a PLLC, an S-Corp, a C-Corp, a partnership, a sole-proprietorship, and all of these are just different ways of organizing your business. Nine times out of ten when you are starting out, the best one for you is an LLC, for a number of reasons.
The Limited Liability Corporation
An LLC is one of the many ways you can choose to categorize your business for things like taxes and registration with government entities. It is one of the most common and simple business types.
As you may have guessed by the name, an LLC helps business owners limit their personal liability by separating their business dealings from themselves and their own personal Social Security Number. They can do this by requesting an EIN number (or tax ID) for their business and using that number to file taxes for the business, open bank accounts, receive 1099s, etc.
When you have an LLC, it also offers you unique advantages when it comes to taxes. Because of the structure of an LLC, you have the option to file either on Schedule C of your personal income tax return as self-employment income or as a corporation that has its own, separate tax return.
This can help you maximize your benefits and minimize your liability when you select the correct filing type for your business.
Should I Open An LLC?
If you are thinking about starting a business, opening an LLC can be a really great first step that will be able to grow with your company.
You can ensure you are protected, give your business legal status, and keep your options open for future growth. An LLC is a great way to get your business journey started.
At ER Financial, we can take care of the paperwork for you and get your LLC set up with the proper agencies, including the registration of the LLC and getting the federal tax ID needed to file its taxes.
Once you have opened your business, you will want to be sure to file your yearly reports with the Texas Comptroller as well as making sure you are bookkeeping correctly to have your income and expenses ready when tax season rolls around.
Conclusion
If you are not sure where to start, reach out to our business experts who can guide you through the creation and success of your very own business. We work with hundreds of businesses for their tax filings, bookkeeping needs, payroll management, and more.
We are a local, family owned and operated business eager to help others in our community get started with entrepreneurship. We can have your LLC registered and paperwork completed in as little as two days!
ER Financial 