If you have a self-made, self-owned business, the connection that you have with your work is likely more than just business. Small business owners typically view their work as more than just a job. In many cases, it is their life’s passion and work all combined into one place. Building a business can be an exciting, but daunting task, especially if you feel as if some of the business jargon is slightly out of your reach. Maybe you know how to run the day-to-day business tasks, but the larger picture appears hazy. If this is the case, you should turn to a reputable business attorney for help. They can guide you in the right direction to find the proper fitting business structure, draft and review business contracts, and more. At Shakfeh Law LLC, our firm has worked with its fair share of businesses, both small and large, new and old. This experience has given us the knowledge of what business model works best depending on the business’s size. For small businesses, we suggest forming a limited liability company (LLC).
What Is an LLC?
A limited liability company is a hybrid business model that offers the benefits of a partnership and a corporation. Companies that are considered LLCs may have more than one owner, known as a “member,” and these members can be individuals or other companies. There is no cap on the number of members that an LLC can have, giving the initial business owner significant flexibility on who they allow to be involved in their business. LLCs, like corporations, also allow members to keep their personal assets separate from the small business’s creditors.
Why Choose an LLC Business Model?
There are several benefits that an LLC structure can offer small business owners in Illinois, including the following:
Liability Protection: Anyone who decides to become a member of your LLC will not need to be concerned about their personal assets being subject to business liability. Except in limited circumstances, members are not personally liable for the actions of the company, meaning their personal property is safe from creditors trying to tap into the members’ personal assets while seeking to collect finances from the business.
Ease in Taxes: In general, LLCs are “pass-through entities.” This means that profits are not taxed before being placed into the hands of the business’s members. This is not to say that taxes will not come out of their income; they will simply be removed on members’ federal income tax returns. With that said, if need be, an LLC can choose to be taxed as an s-corporation if it suits the company’s goals.
Flexibility in Management: If your business follows an LLC model, you have the choice of naming your members as managers allow all members to have equal control, or hiring externally for more experienced management. This is helpful if none of your members have the experience of day-to-day managerial work. Since many small businesses are built off of someone’s expertise for a particular area of work, they may be more experienced with the task at hand rather than managing the entire company.
Contact an Illinois Small Business Lawyer
Small businesses built off of passion may offer quality services or products, but they may not have the background knowledge necessary to navigate the legal logistics. As an LLC ourselves, Shakfeh Law LLC is well-versed in being a small business owner and assisting other companies with their legal dealings. Our business lawyers work tirelessly to help entrepreneurs put their dreams into action. For help determining if an LLC is right for you, contact our qualified DuPage County business formation attorneys at 630-517-5529 to schedule a 15-minute complimentary consultation.