{"id":27012,"date":"2022-05-16T20:23:32","date_gmt":"2022-05-16T20:23:32","guid":{"rendered":"https:\/\/c1mdevsite.com\/braunability.com\/changing-your-small-business-to-an-llc\/"},"modified":"2022-05-16T20:23:32","modified_gmt":"2022-05-16T20:23:32","slug":"changing-your-small-business-to-an-llc","status":"publish","type":"post","link":"https:\/\/c1mdevsite.com\/mdctraining.ca\/changing-your-small-business-to-an-llc\/","title":{"rendered":"Changing your Small Business to an LLC"},"content":{"rendered":"
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It\u2019s not uncommon for a successful small business to consider a change in its organization and management from time to time. When it comes to organizing a business, there are many options provided under the law. One option is to move a small business to an LLC.\u00a0<\/span>\u00a0<\/span><\/p>\n

A Limited Liability Company was created with the intention of limiting the personal liability of the owners. It is very similar to a corporation, but it also allows the business to be taxed like a partnership. Depending on how much your small business taxes are, you may find that it\u2019s a good move to change your small business to an LLC because of the tax benefits.<\/span>\u00a0<\/span><\/p>\n

This new taxing process comes with some learning curves. However, reaching out to a professional business tax consultant firm like Waters Hardy may be a great option for you. As small business tax specialists, we are here to offer our expert advice. We have years of experience and can guide you on what the smartest business tax moves are for your new LLC.<\/span>\u00a0<\/span><\/p>\n

What is an LLC?<\/span><\/b>\u00a0<\/span><\/h2>\n

A limited liability company, or LLC, is a U.S. business structure that combines the tax advantages of a partnership with the personal liability protection of a corporation. Owners of an LLC are called \u201cmembers,\u201d and these members are protected from being personally responsible for the company\u2019s debts or liabilities.<\/span>\u00a0<\/span><\/p>\n

Your personal assets- vehicles, house, savings accounts, etc. are safe if your LLC declares bankruptcy or is sued.<\/span>\u00a0<\/span><\/p>\n

A single-member LLC is considered a pass-through entity because the profits or losses from the LLC are \u201cpassed through\u201d to the owner and taxed as personal income. As a benefit, you don\u2019t have to pay both personal and corporate taxes.\u00a0<\/span>\u00a0<\/span><\/p>\n

A multi-member LLC is also a pass-through entity and taxed as a partnership. This means that each owner paying personal income taxes on their portion of the profits.<\/span>\u00a0<\/span><\/p>\n

What to Consider Before Transitioning to an LLC<\/span><\/b>\u00a0<\/span>\u00a0<\/span><\/h2>\n

Small-scale sole proprietors sometimes find themselves outgrowing their roles as self-employed taxpayers. Switching your business to an LLC is a bit like graduating, an official way to move up.\u00a0\u00a0<\/span>\u00a0<\/span><\/p>\n

Here are questions to ask yourself as you consider an upward move in your business organization.\u00a0<\/span><\/b>\u00a0<\/span><\/p>\n

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  1. \u00a0Is the business growing?<\/span>\u00a0<\/span><\/li>\n
  2. \u00a0Are you earning, or plan to earn more profits?<\/span>\u00a0<\/span><\/li>\n
  3. \u00a0How much are small business taxes, and could you save by moving to an LLC?<\/span>\u00a0<\/span><\/li>\n
  4. \u00a0Are you considering hiring employees to help run your business?<\/span>\u00a0<\/span><\/li>\n
  5. \u00a0Are you considering more owners to share your business?<\/span>\u00a0<\/span><\/li>\n<\/ol>\n

    If you answered \u2018yes\u2019 to any of the above questions, it may mean that it\u2019s a good time to consider moving to an LLC.<\/span>\u00a0<\/span><\/p>\n

    Benefits of Starting an LLC<\/span><\/b>\u00a0<\/span><\/h2>\n

    Some business owners avoid changing to an LLC because it sounds too official. So, they assume that changing must be a complicated process that they just don\u2019t want to take the time to navigate. The truth is, it\u2019s not too complicated at all. In the end, the benefits of an LLC far outweigh any anxiety you might feel about making the switch.\u00a0<\/span>\u00a0<\/span><\/p>\n

    \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Personal asset protection<\/span><\/b>\u00a0<\/span><\/p>\n