Boss Lady

Pros and cons of an LLC business

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A limited liability company is the most simple and least expensive business structure that we have here in Australia. As with all business structures there is a wide range of pros and cons which you can expect, if you decide to set up your very own LLC. This is a structure which combines the flexibility and simplicity of a standard partnership, with the liability protection which you can expect from a corporation. If you are in any doubt as to which is the right structure for you then a good idea would be to consult Prime Lawyers, experts when it comes to business. First though, take a look at these pros and cons of an LLC, which may help you decide.

Pros

Theft that this is a popular business structure comes down to the number of positives which it is able to offer for new business owners. Let’s take a look at what some of those are.

Limited liability

The protection that individuals within the company count on is that whatever happens in the business is the role of the company and will not affect personal lives. This means that any assets are protected should creditors come in to collect from the company. The clear benefit to an LLC is the separation of personal and business affairs.

Flexibility of management

An LLC is completely flexible in terms of who manages it, in some cases this will be a joint management conducted by all members of the business, and in others they may elect a single manager to run it.

Ease

Another clear benefit is the low cost and simple process which is required in order to start an LLC. This is why the LLC is the most common structure and it is accessible for anyone who wishes to get their own business off the ground.

Cons

In the main the pros outweigh the cons which an LLC structure offers, but in the interest of transparency we will also go into some of the drawbacks of this model.

Limitations

If you fail to properly separate your business and personal dealings then you may be at risk should things go awry in the business. This process is called piercing the cooperate veil and it is a reminder as to why you should always be clear and obvious in your separation of assets.

Dissolution

In many corners of the world an LLC will have to be dissolved if any member leaves the company, even if that is because of death. This is not to say that the remaining members are not able to conduct business, even the same business, what they will have to do in such an event is start another LLC. This of course can be a damaging law which means that membership turnover will have to be 0%.

Would an LLC be the best option for you? Or are the cons just a little too much for the type of business which you wish to set up?

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