We promised you that we will talk a lot about different business entities, in order to help you with making the most suitable decision for your e-commerce business. The time has come, today we will discuss something very appealing, which will make you think and understand what exactly you want. Most of our clients are perplexed because of LLC and its various types and we know where this confusion comes from. However, our team at Prestige Auditors will get you through each and every corner of business entities, and no question will ever pop up in your mind.
Today we would like to concentrate mostly on one type of LLC – Single-Member LLC. Pervasive LLCs (limited liability companies) are what most sellers choose when setting up an e-commerce business. This variation of an LLC is a company having only one member/one owner. It is worth mentioning that LLCs don’t have their own federal income tax classification. Do you understand what does this mean? This means that business income will be considered as your personal income and you will be charged based on this fact. This is because LLC is almost identical with its owner, they are not considered to be separate. Your Income will always find its way to you, its owner.
There are lots of advantages of forming a single-member LLC as your business entity.
- First of all, you should know that there is a contractual liability when choosing this type. This means that any agreement you as an LLC owner have ever made logically has certain provisions that you should meet. If somehow you are not able to do so, your real or personal property will be secured in the case of legal actions to recover debts and/or damages.
- Moreover, your personal assets are protected in case your employees undermine your normal business operations: heaven, right?
- One of the advantages of a single-member LLC is that it can belong not only to a person, but also single entities like corporations and even LLCs. This is not possible to implement when choosing sole proprietorship!
- Sir Winston Churchill once said “There is no such thing as a good tax.” Well technically, he was wrong. The ones who choose a single-member LLC will have the opportunity to choose between being taxes as a corporation or a sole proprietor, whichever is best for them.
- Sometimes when seeking investments, you should prove that you are worth investing in. This impression is more likely to be ensured when having a registered business. This is when LLC wins over sole proprietorship.
- Same thing is wit customers. They trust businesses more than individuals, because having a registered business makes the impression of something big, something successful, and something more reliable.
We wanted to introduce you to the world of LLCs and their types. This will make it easier for you to make a decision concerning the entity of your future and profitable e-commerce business. We know that the entity world is confusing, rather than fun, however we will make sure that all of your steps to starting an e-commerce business will be as fun and entertaining as it is possible!