would like to set up a company that has operational flexibility and tax efficiencies, but I would also like reduce my personal legal exposure if the company were to go bankrupt or be subject to a tort. Which form of business would best suit my needs?

Question

Business

Izabelle Copeland

19 May, 06:52

would like to set up a company that has operational flexibility and tax efficiencies, but I would also like reduce my personal legal exposure if the company were to go bankrupt or be subject to a tort. Which form of business would best suit my needs?

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Answers (1)

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Caroline Mora · Answer 1

Answer: D. LLC

Explanation:

A Limited Liability Company (LLC) is your best chance at the requisites mentioned. With an LLC, you go into business with some others and you are called 'owners' or 'members'.

The LLC will be its own distinct legal entity and as such if the company was to go bankrupt, creditors would come after the company and not you meaning that you have limited Liability.

There is also the tax benefit of not having to pay taxes twice. This means that after taxes are paid on the LLC's tax, the income you get from the LLC does not have to be paid tax on.