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/biz/ - Business & Finance

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613400 No.613400 [Reply] [Original]

What is the big deal with LLCing a business? How is it any more lucrative or safe or whatever than just being a sole proprietorship?

>> No.613403

In theory it gives you limited liability protection (hence the name). In other words you aren't personally liable for debts and legal issues that affect the company.

In reality it's easy for a lender to pierce the veil on a LLC with a single member to get to you.

>> No.613406

>>613403
so...is it even worth it?
like, the time and money it takes to have one legally licensed is somewhat useless in the end?

>> No.613411

>>613406
If it's just you, usually. When you have partners is when it makes a lot more sense.

>> No.613427

Tax purposes in certain states.

Benefits the "self employed" especially.

>> No.613779

>>613403
>>613406
>>613411
In Wyoming and Nevada, there is specific protection on the books now for single member LLCs because of this veil-piercing abuse by judges. Wyoming is the most BASED state to form an LLC in. You don't even have to be a US citizen or have an address in the US. It's also the first state LLCs existed in. Unlike Nevada, they share your corporate income data with the IRS (which gets Nevada's anyways) so it looks less shady, too.

>> No.613810

>>613400
Personal protection from business liabilities is the obvious one (though it may not apply to legal penalties?)

The other is lower taxes when you're making a lot of money - company tax rate being lower than personal income tax rate after a certain level.

There's also deduction advantages depending on the business you do, like the company could provide you with a car, computers and shit like that which can lower its taxable income.

I don't know the US systems specifically but that's why people do it in most places.