Why You Need to Set Up an LLC
The benefits of forming a Limited Liability Company (LLC) are numerous and the process has quickly become the favored type of business organization in Ohio. LLC’s combine aspects of both corporations and partnerships while providing greater amounts of flexibility in owning, operating, and transferring a business. An experienced business attorney can help you set up the right type of LLC and walk you through the appropriate filings with the Secretary of State’s office and the Internal Revenue Service (IRS).
Whether the LLC has only one member or multiple members, this type of business entity allows for the protection of assets. One of the most attractive features of an LLC is that it helps protect members of the LLC from company creditors. Ohio has transformed into one of the leading states in the country for offering protections to LLC members facing legal action from creditors. Ohio allows only for a “charging order” on the interest that a member has in the company. The charging order prevents creditors from accessing a company’s assets and potentially interrupting business operations.
Another of the many reasons to form an LLC is the countless tax benefits. Our office can work with your accountant to make sure that your business is put in the best tax position possible. In addition, LLCs are extremely beneficial for avoiding the burden of probate and estate and gift taxes because they streamline the process of transferring interests and ownership to your beneficiaries.
One of the often overlooked key elements of running a successful LLC is having an operating agreement. A thorough and well-drafted operating agreement is the vital document that outlines how the LLC operates and limits the liability of the members. Every operating agreement should specify important topics such as contributions of the members, transferability of membership interests, the death, bankruptcy or divorce of a member, allocation of profits, management and voting rights, and indemnification. Taking the steps to ensure your business is properly operating is imperative to protecting your assets and being a successful business owner.
Contact our office today to setup your LLC or discuss what type of business entity is right for you.