How Do I Protect Your Company Legally?

How Do I Protect Your Company Legally?

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As an entrepreneur, you want to make sure that you’re starting your business the right way. However, given that you can create one of several different entities, how can you be sure that you’re picking the right one? Well, today, we’re going to be discussing the benefits of an LLC for legal problems. Limited liability companies are quite popular among small business owners because they provide adequate legal protection without being as complicated as a corporation. Let’s see what you can expect from an LLC.

Legal Separation of Owners from Assets

If you were to start a sole proprietorship or a standard partnership, then that means that you are fronting your own assets and tying them into the business. When that happens, you are responsible for all debts and legal troubles that the company gets into, which can be a huge financial risk.


Fortunately, an LLC works differently. The law sees the business as a separate entity from you or any other partners, meaning that it doesn’t affect you personally if the company accrues any debt or legal issues. This is a crucial shield that protects you from assuming all of the financial risks of starting a new business.

Less Overhead

With an LLC, you can make decisions for your company without needing approval from partners or a board of directors. This can be spelled out in your operating agreement.

How to Start an LLC

If you’re interested in turning your small business idea into an LLC, then you have to follow these steps:
  • Pick the state in which your company will be based
  • Choose a name. Check your state’s requirements as there may be limitations.
  • Choose a registered agent. This is the person who will deal with the LLC forms for your business. You can use yourself or hire one to keep things more professional.
  • File articles of organization.
  • Create an operating agreement. This is the form that stipulates division of authority, as well as payments and other matters.

Overall, the whole process is not that complicated once you have your paperwork in order. The most important thing is to get legal consultation to ensure that everything is clear and concise, particularly in the operating agreement.

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