Technology affords us the opportunity to produce, market, and sell to a worldwide audience, from the comfort of our homes. With this, a small “hobby” can seemingly transfer into a full-fledged business overnight. When this happens, it is important to consider how to best grow your business while simultaneously protecting your personal assets. This is where a limited liability company (“LLC”) can be very useful.
An LLC limits personal liability because an LLC is legally separate from its owner(s). LLCs are responsible for their own debts and obligations, and although you can lose the money you have invested in the company, personal assets such as your home and bank account cannot be used to collect on business debts. Your personal assets are also protected if an employee, business partner, or the business itself is sued for negligence.
An LLC is also more streamlined in its operation than other business entities, forgoing many of the formalities associated with corporations. Additionally, an LLC also lends a certain level of professionalism and credibility to a business. Customers and potential investors are likely to feel more confident dealing with a structured and legally recognized business.
An experienced business attorney can assess your situation and help you establish a corporate entity that best fits your needs.