Saturday, August 29, 2009

5 Reasons To Form A Business as an LLC - #2

Generally speaking (all situations are different and an attorney should be consulted prior to forming a company), I believe the LLC form is the most advantageous for small businesses for several reasons. Here is the second benefit an LLC provides:

The administrative burdens are light. From a corporate governance standpoint, an LLC is not subject to nearly as many requirements as corporations. There is no requirement to have a board of directors and, therefore, resolutions and written consents are not necessary for action. Issues such as "piercing the corporate veil," which can allow creditors to get past the corporation and go after the owners of a corporation for debts owed are not nearly as prevalent in the LLC sphere as they are with corporations. Additionally, there are few filing requirements the state requires. The only major on-going requirement is that an annual report be filed with the Secretary of State each year. This is an important step, however as a failure to timely file the report can be grounds for administrative dissolution. Of course, permits, licenses and other local filings may be required in particular locations or industries. As always, please contact Ross Law Office for additional information.

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