Limited Liability Companies

Should You Form An LLC? McMillan Metro Can Help You Decide

There are three big decisions any business startup has to make when starting out. What their idea is, who their team members are, and how they want to legally structure the business.

While the first two might be up to you, McMillan Metro, P.C. can provide valuable consultation and ongoing assistance when it comes to the third item. Our attorneys can help you sort out the pros and cons of whether you should form an LLC (Limited Liability Corporation), and—if you decide it’s best for you—help you to administer the LLC in the years ahead.

The core attraction of an LLC is simple—the structure offers business owners the legal protections that come with incorporation—most notably, the protection of your personal assets.
But, with significantly less paperwork and costs than are typically associated with incorporation.

The advantages don’t stop there. An LLC offers tremendous tax flexibility being the only legal structure where a business can choose the method in which it is taxed. The most common method is to use the so-called “pass-through method”, wherein profits go straight to the owners and then are simply reported as personal income. But the pass-through method can leave a business owner subject to a higher self-employment taxes.

Moreover, there are tax advantages to setting up as an S-Corp or C-Corp that apply in certain situations. Does your business meet these situations or is forming an LLC still preferable? McMillan Metro’s lawyers will make sure you understand all the implications before making your decision.

If you want to form an LLC, it’s likely because of the security that comes with keeping your business being its own separate legal entity, entirely separate from your personal finances. This is true, but there are still caveats that our lawyers can help you understand and plan around.

For example, is your business sufficiently capitalized at the outset? If not, a judge may rule that your personal assets could be at risk in a lawsuit. Do you have a structure in place to maintain a strict separation of business and personal finance? Something as simple as paying a business expense with a personal credit card can cause a judge to “pierce the corporate veil” and declare your personal assets to be liable in a business dispute. This is where an experienced attorney can help.

There’s also the need to meet state requirements for annual meetings, complete with minutes. The ongoing paperwork and administrative work can be daunting and McMillan Metro’s team of expert lawyers have extensive experience in keeping LLC’s compliant.

McMillan Metro will also guide you in taking a big-picture look at your needs for additional capital as time goes on. Investors often prefer to avoid an LLC structure. The very flexibility that makes it an attractive option for the entrepreneur can make it risky to the outside investor. Would you be better off choosing a different legal entity? Or do you still form an LLC? We can sure you have accurate information and have asked the right questions before the decision gets made.

The startup time in a business is an exciting time, but also a stressful one. The steady hand at the wheel that McMillan Metro’s experienced attorneys offer is a tremendous benefit to entrepreneurs deciding whether an LLC is the path to choose. Contact us today to set up a consultation.