There is nothing as good as being the boss, where you do not have to work under anybody. The thought of creating your own business is very fantastic and you would also plan to create a business plan. But do you know that one primary step of starting a business is knowing what business structure it would fall on. Deciding the business structure for your company is not an easy task as it requires maximum concentration and it is a very huge decision. When deciding this, some elements are also put into consideration. Such as; regulations, tax treatment, personal liability, and so on.
All these listed are determined by the business structure your business has. Business structures include:
- Sole proprietorship
Limited liability company.
The most effective way to have your business or company set up is a limited liability company. The limited liability has both qualities of a corporation and that of partnership. The owners of a limited liability company are called members. The laws of the limited liability company are controlled by different states but are present in all. Therefore the laws and regulations of limited liability companies are different from other states. A single person is allowed to start a limited liability company.
One of the qualities of the LLC Formations New Mexico is that the owners of businesses have protection against debts. The creditors can claim assets of the company that is owing but cannot claim the personal assets of the owner of that business. This is one major reason why you should have a limited liability company. It is an added advantage over the other business structures.
Considering the other business structures, LLC formation is the most convenient. It also has the least complications and complexity compared to the others. It is very affordable and does not require so much documentation. The operational management is easy and the record-keeping is not so much of a big deal. There is no board of directors, annual meeting, need for maintenance of the record book in the limited liability company.
All these qualities have enhanced convenience in the limited liability company thereby saving time and costs. Starting a limited liability company needs the documentation of the articles of organization. This includes a database of the business name, address, and members. Thereafter, the operational management is not compulsory in all states but is essential.
The limited liability is not rigid especially in the aspect of investment and profit-sharing. The members of a limited liability company can invest in a separate proportion different from their percentage. This means that, apart from the former investment on their ownership proportion, they can still make other investments. This is done by making an operating agreement stating the percentages of the profits the company has made. Also including the losses. No matter the investment. This would ensure that nonmembers who want to invest can invest without having to be a member.