When I started my business partner and I began to formulate our business we researched the different business structures to see which fit our model the best. In the meantime we operated as a partnership or an unincorporated business structure led by two individuals. Once we decided that our business was not a sideline but something we wanted to grow and exist beyond ourselves to one day possibly hand down to our children we knew incorporating would be required. Partnerships only legally last as long as the partners are alive or until they disband. The business ends when the partnership ends. Once you incorporate your company it becomes a separate entity.
Reasons my business partner and I chose an LLC:
Being blessed with a partnership which functions seamlessly I had no worries about the direction our business would take as long as were at the helm. However, we had fully intended on making our mark in the business world and wanted to make a name for ourselves. Therefore we wanted consistency in how our business would be represented. An LLC made our business a separate entity so we function on terms of what is good for the company not our egos, not our moods, and not by changes made by another manager. We drew up a vision and a mission which we both abide by on a consistent level. The mind set is different and I feel that will alleviate potential problems.
We wanted our business to be taken seriously. We took it seriously and wanted others to know we would be around for the long haul. Becoming an LLC gave us a sense of credibility to other businesses, organizations and clients.
Part of our motivation for our business was to provide for our families and possibly employ or bring in as managers family members. This meant we had to create a business beyond ourselves and one which would not risk our personal assets. An LLC gives us limited liability so we can each rest easy knowing no one will be taking our houses if the unthinkable occurs.
An LLC is the most basic way of incorporating a small business. It provided us the flexibility to file taxes individually or as a company. An LLC is not as formal as C or S Corps therefore easier to manage while we get our feet wet.
We wanted our company name to be protected. We did not want to spend our hard earned money on advertising for our business while giving the benefit to another business that just happened to have the same name. Besides, it took long hours to decide on the perfect business name and we wanted it protected.