Today I’m talking to you about how you own your business. Because owning your business (and your trademarks and copyrights) in the most beneficial form matters. Why?
The right business structure for your business provides you, as the owner, the most:
- protection of personal assets from liability
- protection of creative assets from liability
- tax savings; and
- ease and/or flexibility of ownership and control
The most common entity clients ask me about is the LLC, a limited liability company. It is not the best choice for every business, however. Is an LLC the right entity for your business?
4 Signs An LLC is Right for Your Business
- You own trademarks and copyrights—and you plan to use them to grow your business.
- Your business has more than one owner.
- Your business makes more than $20,000 in profit.
- You sell a product (info or physical).
4 Signs It’s Not.
- You are the only owner of a service business.
- You don’t own any trademarks or copyrights (and you don’t plan on it).
- Your business makes less than $20,000 in profit.
- Your business will take on outside investors (or trade stock for services or trademarks/copyrights/patents).
For many businesses planning to grow, an LLC can be the right legal form. Below is an info-graphic on the relative benefits of forming an LLC with what is called an S-Corp Election. (An LLC is a legal choice; an S-Corp is a tax choice.)
The three circles represent (1) tax savings; (2) protection of personal assets from liability; and (3) protection of creative assets (trademarks & copyrights) from liability for a single owner service business, a multi-owner service business and a product business.
Do you see your business here?