Are you trying to set up an LLC for your business, but are unsure if it’s the right choice for you? There are some misconceptions and LLC myths that might be holding you back from taking the important set of improving the corporate structure of your business.
50% of small businesses are operated from home, however, this doesn’t mean that the business structure should have an amateur setup. By the end of this article, you’ll see that any small business can benefit from an LLC and why you should take the step.
Myth 1: Setting up an LLC is Expensive
Some business owners believe that setting up an LLC is expensive. And you will need to sacrifice a large portion of your startup funds to complete the process. However, you’ll be pleasantly surprised to learn that obtaining an LLC for your business is inexpensive.
In fact, you can get an LLC for about $200 to $500, depending on the service that you choose. For most businesses, this amount of money can be spent on improving the corporate structure, and will not hurt the growth phase significantly.
Myth 2: It’s Hard To Get an LLC
Inexperienced business owners may believe that setting up an LLC is difficult. It isn’t and you can take advantage of dedicated business services. These will assist you with setting up an LLC for any state.
Such services make it easy to understand what information is required, and help you at every step of the process. Make sure to find a service that has a user-friendly interface that offers plenty of hints along the way.
Also, try to find an LLC setup service that has excellent customer service. This ensures that you can get the help you need from a real person who is knowledgeable about such matters. The type of communication methods should include email, live chat, and phone. Also, it heps if there is live chat 24/7 to assist business owners in different time zones.
Myth 3: There is no Advantage to Getting an LLC
Some business owners believe that there is no big advantage to setting up an LLC and that is wrong. The size of the advantages varies on what business assets you already have, and here’s some of the benefits you can expect:
- Bank accounts: foreigners that set up an LLC in the United States are able to open a US bank account, which is a huge benefit if you want to sell products and services in the country. That’s because you can keep all the finances in USD. Hence, you don’t need to pay the fees associated with currency conversions.
- Higher exit value: you’ll find that when you take steps like getting an LLC and building other assets, the value of your business increases. Therefore, when you decide to finally sell your business in the future, you may find that the business exit value increased. In most cases, the cost of obtaining those assets pay for themselves and provides a profit too.
- Bank loan: once you get a US bank account as a result of setting up an LLC, you are eligible for a bank loan. The chances of getting one and the size varies based on the specifics of your business, but being eligible means that you can improve your business cashflow.
- Improved organization with partners: when you have business partners, you need to organize documents and ensure the legal ones are handled officially. This can be done using an LLC, where all parties can view the important details independently.
- Taxes: when setting up an LLC you’ll see that you can improve the tax structure of your business to avoid double taxation. The details depend on if you’re a US citizen, what state you register the LLC in and much more.
Myth 4: You Should Put Off Getting an LLC
Starting a business can be overwhelming since there is a lot to learn and accomplish. Therefore, adding another task such as setting up an LLC might be the last thing you want to do. Sspecially, if you don’t understand the urgency of getting one.
However, as mentioned above, there are advantages to getting an LLC that will benefit your business from the start. For example, being able to secure a bank loan at the start of your business journey ensures that you’ll have more money to spend on growth.
Therefore, you should strongly consider getting an LLC before you start selling and acquiring new customers. You’ll see that it pays for itself in the long-term. After all, setting up an LLC is inexpensive and easy with the large choice of services out there.
Myth 5: LLCs Are Only for Small Business
One of the top LLC myths is that only small businesses should get an LLC, and bigger companies need to opt for another corporate structure. However, this is incorrect and there is more utility to LLCs for larger businesses than you might realize.
For example, even large companies like Amazon take advantage of LLCs for their subsidiaries. You should also think about how an LLC might apply to your business.
Final Thoughts
The LLC myths in this article are among the most common that you’ll see business owners say. If you’ve had reservations about setting up an LLC, then perhaps now you can go ahead and pull the trigger.
Also, understanding the LLC myths allows you to make the correct choices without having any regrets. Ideally, find a good quality service that can help you set up the LLC with the lowest cost.
